Business credit cards were introduced for the sole purpose of serving the business needs of an individual. Offered by financial institutions, these credit cards can help you grow your credit over time. Although, people fail to recognize the full potential of such credit cards as they often do not receive an adequate line of credit.
Subsequently, maximizing your credit limit becomes a necessity when it comes to expanding your business or making large purchases. As a short term financial tool, you can gain significantly from the increase of credit card limit to fund your business expenses.
Ways to increase credit limit of business credit cards
Increasing the credit limit of a business credit card has multiple benefits. You can earn rewards and discounts at purchase stores besides having access to an instant substantial amount to meet your business expenses.
A higher credit limit is extended to individuals having a decent credit record. Nevertheless, some other probable ways of increasing the limit are –
1. Reduce your expenditure
When you use a business credit card, make sure you spend only on purchases of your business valuables. It is advisable to keep your credit usage ratio around 60% of the limit while doing so as well. This will help you reduce your expenditure on unnecessary purchases.
A lower ratio acts as a tool to indirectly help you gain access to a higher credit limit from the credit card issuer.
2. Pay your debts on time
Set a budget and plan your expenses accordingly. Repay your credit card debt as early as possible and make sure it is not carried forward to the next billing cycle.
Paying on time shows that you can manage your finances well, and hence the credit card issuer can grant you a higher credit limit too.
3. Build your credit score
Having a decent credit score around or above 750 is likely to help you convince your credit card issuer to grant you a higher credit limit. In case you have a below-par score, try to clear your outstanding dues on the credit card for successive months and reduce other financial liabilities, e.g. – other existing dues.
Repaying loans on time and credit card bills before the due date directly impacts your credit score. A regular payment habit automatically boosts the score to your favor, thereby helping you to go for an increase in the credit card limit.
4. Balanced debt to income ratio
One of the prime reasons individuals get into the debt trap is the inability to analyze their repayment capability based on their income. Keeping a balanced debt to income ratio will help you plan your business and personal expenses conveniently without straining either of them.
Doing so, will help you pay your credit card bills or repay other lines of credit on time. This will aid in proving your creditworthiness to the credit card issuer and to successfully apply for a business credit card.
Although business credit cards offer a myriad of benefits to the individuals by extending an easy line of credit, there are other regular cards that offer certain added benefits too.
In this regard, for added benefits, you can opt for the Bajaj Finserv RBL Bank SuperCard, which provides attractive reward points, welcome bonus, cash backs, etc.
Therefore, it is the onus of the credit cardholder to use a credit card wisely in order to make the most of benefits offered by the issuer. By using the credit card to your advantage, you get the leverage to manage your finances well. Besides, you can also request your card issuer for an increase of credit card limit, which in turn will help you expand your business too.