Credit cards, like many other credit facilities, come with a limit up to which you can borrow funds. It’s the maximum amount you are allowed to spend on your card, in a given period, which is usually a month. Once you reach the set limit, you must pay the total outstanding balance or at least the minimum amount due before you start spending on the card again. The main reason why this is an important piece of information is because your bank will charge you an over-limit fee every time you overshoot the ceiling limit. And although this fee may vary from one bank to another, it usually is around S$40 per instance. The credit cap you get on your card varies depending on which bank’s card you use. In most cases, this limit is up to 4 times your monthly salary, and also depends on your credit score.
There may be times when you need a higher credit limit to cater to larger financial needs. You may want to pay for an expensive vacation or wedding expenses using your credit card. In times like these, the limit available on your existing may not be sufficient to pay for these expenses. So what do you do? Fortunately, your credit card limit can be changed over time. If you maintain a good enough credit score, chances are that the bank itself will offer to increase your credit limit. But that doesn’t mean you have to wait for your bank to automatically increase it. You can always request the bank to review your credit cap and increase it if needed.
Wait for the Bank to Offer You an Increase
There’s an old saying that goes, “Good things come to those who wait”. While we may be able to contest that statement, it holds true in this case. Banks keep a vigilant eye on how you are using the credit made available to you. Like we mentioned earlier, if you have a good credit score, your bank may offer you a credit limit increase after a few months. This is where it pays to be a good customer. One way by which you can get a good credit rating is by making payments on time, and especially by ensuring that you pay the whole outstanding amount every month.
Ask Your Bank for an Increase
Waiting for the bank to automatically increase your credit ceiling can take time. And sometimes you just may not be able to wait, especially if you have an urgent need. In this case, you should approach the bank directly. An increase can be made in one of three ways:
Permanent credit card limit increase
One of the factors which determine how much credit you get on your card is your income. In case your income has increased over the past few months, you can call the bank or write to them asking them to review the limit. Some people may use multiple credit cards to pay for their expenses, but this is not necessarily a good practice. It is always better to own one card with a higher limit than having a number of credit cards. With multiple cards, you always run the risk of not managing them well. You might forget to pay your dues, and this can result in your credit score taking a hit. A bad credit rating is the last thing you need on your financial records.
Temporary credit card limit increase
Let’s say you have to pay for your wedding or your child’s wedding. Or maybe someone in your family gets hospitalised and you need your credit card to pay for the medical expenses. Such situations call for a temporary increase in your credit ceiling as opposed to a permanent increase, since you may not need a high limit once the need is paid for. In such instances, you can request your bank to grant you a temporary credit card limit.
Some of the banks in Singapore allow you to increase your card’s limit by making an advance payment. Let’s say you want to use your card to pay for an expense worth S$6,000, but your available credit card limit is only S$4,000. What you can do is, to make an advance payment of S$2,000 towards your card and that will increase your limit to S$6,000. This is useful when you want to make a one-time purchase only through the card or to get cashback, rebates, or other rewards available on your card.
Apply for another card
Another way (probably the simplest one) of increasing your credit cap is to apply for a card that has a higher spending limit than the one you already own. This could be from a different bank or from the one you already bank with. You could choose to surrender your previous card or continue to use it along with the new one.
Do bear in mind that using multiple cards can be tricky at times. They offer you the advantage of having more credit, but also come with their share of risks. Keep more than one credit card only if you are sure that you will be able to manage them both well and make your payments on time, every time.
How it Works in Singapore
If you want the credit limit on your card to be increased, you have to approach the bank for what is known as a limit review. The procedure is almost the same for all banks in the country. We have compiled a list of banks and how you can apply for a review of your credit cap.
HSBC Credit Card Limit
- Download and fill the bank’s Credit Limit Review Form.
- Sign the form and upload it with the required supporting documents. The supporting documents required are: payslips for the last 3 months (computerised), last six months’ CPF contribution statement, and latest Income Tax Notice of Assessment (for salaried employees); Income Tax Notice of Assessment for the last 2 years (for self-employed individuals); and employment pass with at least 6 months validity (for foreigners).
- You can also send the application form with documents via mail to HSBC’s registered address in Singapore.
- If you need any assistance regarding this facility, do not hesitate to contact the bank.
OCBC Credit Card Limit
- Download the form for reviewing your credit limit from the bank’s website.
- Attach your latest income documents.
- Once you have completed the form and attached the documents, you will have to mail to OCBC’s mailing address.
- Alternatively, you can also fax the form and documents to the bank via their registered number for this facility.
- If you want a temporary increase, you can speak directly with a customer service officer by calling the bank’s dedicated hotline.
Citi Credit Card Limit
- Use the online application facility available on the bank’s website.
- You can also download the form from the bank’s website, fill it up, attach the required documents, and send it back via mail to the required address.
- If you’re looking to get a temporary credit limit change, you can log into Citibank Online and make your request there.
- For any assistance related to this review, get in touch with the bank on their 24-hour phone banking service.
DBS Credit Limit
- Log into your internet banking account using either your iBanking login details or your card number and PIN.
- Download the required form and fill it up.
- Once you have duly filled up the form, upload it along with the supporting documents.
- If you need only a temporary increase in the credit limit, you can apply online.
- You can also increase the credit limit by making an advance payment to your credit card account.
UOB Credit Limit
- You can log into your personal internet banking account and apply online. You also need to upload supporting documents to prove your income details.
- You can also download the Credit Limit Review Form, attach all the required additional documents, and either mail it to the bank or fax it to them.
- You can also choose to visit any of the nearest branches and apply for the review directly, if that is more convenient for you.
- For a temporary increase in the credit limit, call the bank’s customer care for assistance. Temporary increases are available only for certain purposes.
Standard Chartered Credit Limit
- Download the bank’s form for reviewing the credit of your credit card and complete it.
- Mail the completed form along with the necessary documents to the address given by the bank or fax them to the bank.
American Express Credit Limit
- Download the Credit Limit Review Form from the bank’s website, complete the form, and sign it.
- Attach your income documents like latest payslips or latest Income Tax NOA.
- Send them to the bank either through mail or fax.
- You can also email the form and the documents to the bank.
- You can request for a temporary increase by calling the customer care helpline.
CIMB Credit Limit
- Go to the bank’s website and download the Credit Limit Review Form.
- Print the form out and fill in the details.
- Attach all the relevant income documents to the form.
- Mail them to the bank using the business envelope.
- For a temporary increase, download the relevant form and mail it to the bank.
BOC Credit Limit
- Download the required form from the bank’s website and complete it.
- Send the completed form along with the necessary income documents using the business envelope to the bank.
- You can also use the fax facility provided by BOC to send in your filled-in form and relevant documents.
Benefits of Increased Credit Card Limit
It improves your credit score: The limit on the card you use has a direct impact on your credit utilisation ratio, which, in turn, affects your credit score. For example, let’s assume you have a credit card spending cap of S$10,000 and you spend S$7,000 on your card every month, which is 70% of your available credit. Even if you pay your outstanding dues regularly and in time, since your credit utilisation ratio is very high (70%), it means that you are close to using up all your credit at some point. On the other hand, if you consistently use only about 30% to 50% of your total available credit, it will show that your monthly expenses are well within what you earn. This shows banks and financial institutions that you are financially responsible and less likely to default on any loans you apply for in the future. A high credit limit with low credit utilisation is a good way to improve your credit rating.
You may get better loans: This is a direct result of having a good credit score. Banks are more likely to give you a higher loan amount and better interest rates and repayment options when you prove to them that you’re financially prudent.
The flexibility to spend more: With a higher credit ceiling, you get the flexibility to spend more when the need arises. However, use this financial freedom with caution. Use your card wisely to make the most out of it and prevent unnecessary spending.
Better rewards: As a customer with a higher spending capacity on your card, you may be a more valuable asset to your bank. Due to this, they may give you better rewards for card spends, allowing you to earn and accumulate rewards such as cashback, rebates, and more at a better rate.
Eliminates the need for multiple cards: Why have two cards when you can have just one that gives you the features of two? With a higher spending limit, you may not need more than one credit card. This will help you manage your finances better and pay outstanding amounts on time, simply because keeping track of many cards can be a confusing activity.