Can You Increase Your Credit Limit?
Depending on the amount you earn, you may or may not be able to get the credit increase you want. This is due to Bank Negara guidelines that restrict the amount of credit extended to a cardholder. The rule follows that if you earn below RM36, 000, your credit shall be two times your monthly salary per issuer, with a maximum of two issuers. Thus, if you earn RM2, 500 per month, the maximum limit is RM5,000 per issuer.
But if your salary is above RM36,000, you’ll have a little more freedom with the increase amount but this is still subject to the bank’s review of your income and credit status.
How to Request For an Increase
Now if your credit limit is below the maximum and you would like to permanently increase the limit, you will need to apply for one from your bank.
The exact procedure might differ but it typically involves filling up an application form and submitting your income documents (e.g. salary slip, tax form, EPF statement, EA form, etc.) to your bank. You can do this in person at the bank, via mail, fax or online. Note that this process can take a bit of time as the bank will need to review your application before approving or rejecting.
If you need cash fast however, a temporary increase is a better option. Depending on your credit card issuer, you can do this over the phone or online. This type of increase typically last 30 days and is meant to help you cover emergency payments.
Another thing you can do is update your income records to the bank if your money situation has improved and wait for them to offer a limit increase. Of course, you can’t wait around if you need quick cash, so only do this if not pressed for time.
Even If You Can, Should You?
Just because you need more money, it doesn’t mean that you should just increase your limit. You do need to consider if it is indeed the right move for you.
For instance, if you can afford to make repayments, have recently had your income increased, are a good paymaster and you don’t have a way to access more cash otherwise, it might be a good idea to request an increase when needed.
On the other hand, if you are prone to overspending, are currently only making the minimum payments, your financial situation has not improved and the increase offer is coming at a high rate, you might want to think twice before going ahead with it.
Why Not Get a New Credit Card Instead?
If you have just one card or if your income is above RM36, 000 and you are allowed more than two cards, should you simply ask for increase or shop for a new one?
This depends, if your current credit card is a low-interest card that improves with loyalty, it might be better to stick it out. However, if a new card can offer you lower rates, a higher credit limit and better terms, it might be a good idea to add to your plastic arsenal.
Thinking of a new credit card? Be sure to shop around first! Use our super nifty comparison page to research and discover the best card for your needs.