Many people are adept at credit cards, but are unaware of many issues related to them.
One of them might be about the credit card limit assigned to each person. This can even cause a complicated situation such as not having enough limit for a purchase due to having made installments of another previous purchase.
The purpose of this content is to show you how the credit card limit works so that you can use it carefully and correctly.
What this article covers:
Credit card: after all, what is the ideal limit?
Credit card limits are not the same for everyone. In fact, each person has their monthly income and different needs. Before you can get your application approved, a credit review is performed to find out if you qualify for that credit card.
Tips to understand which credit card limit is right for you
Each bank, whether digital or physical, has a minimum income to acquire a credit card and many require you to open an account as well.
When applying, you will have your income assessed and they will check if you are a good payer. And so, the bank determines the amount they will release to you.
How to increase or reduce the credit card limit?
It is now easy to monitor the limit that is available through the internet banking app from your bank. In it, you can see the purchases that were made on the credit card in the statement, the installments and how much you still have available to spend.
To reduce, you can change your limit within the application itself to be able to control your finances. To increase it, it is better to get in touch with your bank’s SAC, for better guidance on how to proceed. It is likely that you will need to request a new credit analysis and proof of income.
How to turn credit card limit into cash?
It is not a function that is highly encouraged by the institutions, so they allow you to withdraw a small portion of the limit. It has high fees, so many give up withdrawing money that way.
If you really want to, just go to an ATM and select the option to withdraw with your credit card.
I have a credit card limit but I can’t buy: what to do?
There are two possibilities for this situation to happen to you. The first is having forgotten to pay the last card bill. Don’t let your card be blocked or your name dirty, make the payment and in a few days it will return to normal operation.
The second is trying to buy something without having the necessary limit, you may have simply bought something you don’t remember and lack a small amount to be able to pay on the card.
How the installment credit card limit works
Let’s assume that you have released a limit of R$1,000, and you want to make a purchase of R$900 in 6 installments. It will be in 6 installments of R$ 150 without interest. On the day you make the purchase, you will have occupied practically your entire limit. Only R$100 will remain for you to use until the next invoice is paid.
As you pay invoices, your limit will be reset. If you prefer, you can pay the installments in advance. For this reason, it is essential to make a financial plan to know what you can spend or not.