Credit cards, like any other credit facility, come with a limit. It’s the maximum amount you are allowed to spend on your card. Once you reach that limit, your bank won’t let you spend more until you pay the total outstanding balance or the minimum due amount. You will also be charged an over-limit fee of around S$40 every time you overshoot the ceiling. Most often, this limit is 4 times your monthly salary, but it also depends on your bank and your credit score.
Fortunately, your credit card limit can be changed over time. If you have a good 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 go ahead and request the bank to review your ceiling.
Check out some ways you can increase your credit limit
Permanent credit card limit increase
Since your credit card limit is determined on the basis of your income, you can always ask your bank to review the limit once your salary goes up. Remember, it’s always better to have a single card with a higher limit than having multiple credit cards. With multiple cards, there is a risk of your credit score going down if you can’t manage your payments well.
Temporary credit card limit increase
There are situations like wedding and hospitalisation when you need higher credit limit for a limited time period. For those times, you can ask your bank for a temporary credit card limit review.
You can also increase your card’s limit by making an advance payment. Imagine you want to buy something worth S$5,000 with your card. But your credit card limit is just S$3,000. In this case, you can make an advance payment of S$2,000 towards your card, so that will increase your limit to S$5,000. This is useful when you want to make a purchase only through the card to get reward points or cashback.
Benefits of increased credit card limit
Improves your credit score: Your card credit limit directly impacts your credit utilisation ratio, which, in turn, affects your credit score. Let’s say you have a credit card limit of S$10,000 and you spend S$7,000 on your card every month. In this scenario, you might be paying your bills regularly and in time, but your credit utilisation ratio is very high at 70%. High credit utilisation ratio indicates that you are about to use your entire credit availability, which can affect your credit score.
Flexibility in spending: With a higher credit limit, you get the flexibility to spend more when an emergency situation arises.
Improved purchasing power: Having a card with a higher credit availability helps improve your purchasing power.
Credit Card Limit Review Procedure
The procedure for having your card limit reviewed is mostly same for all the banks. Check out the detailed procedure for some of the banks in Singapore to get a better idea.
HSBC Credit Card limit review
- Download and complete the bank’s Credit Limit Review Form.
- Upload the signed form with supporting documents. The supporting documents required are: last three months’ computerised payslips, last six months’ CPF contribution statement, and latest Income Tax Notice of Assessment (for salaried employees); last two years’ Income Tax Notice of Assessment (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 snail mail to HSBC Bank’s registered address.
OCBC Credit Card limit review
- Download the Credit Limit Review Form 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 at +65 6830 7917.
- For temporary increase, you can speak directly with the bank’s customer service officer at 6363 3333.
Citi Credit Card limit review
- You can visit the bank’s website and apply online.
- You can also download the form from the bank’s website, attach the required documents, and send it back via snail mail.
- For temporary credit limit changes, you can call the bank’s customer care directly.