[ADVISE] Any issues in using more than credit l...

[ADVISE] Any issues in using more than credit limit of the credit card by loading extra amt to credit card?

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guys, wanted to know if there are any issues on out cibil or IT or anything on the below case.

If we want to make a single transaction of 1 lakh and we have a credit card limit of 40k.
we load 60k extra as 40k is already available credit limit for usage.
then total will be 1lakh credit in the credit card for usage.

any issues guys?

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depends on bank

EDIT: I meant it will depend whether your bank will let you make this txn or not.
No idea about cibil or IT dept in this situation

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@cm4444 wrote:

depends on bank


thx bro
icici https://cdn2.desidime.com/assets/textile-editor/icon_rolleyes.gif
any idea?
kg pending

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@rajrocks

Your CIBIL score will take a hit. Credit utilization plays a vital role in calculating your CIBIl score. If you have used more than 70% of your credit, CIBIL thinks you are desperate for credit. Banks are also cautious to deal with customer’s whose accounts are riddled with high credit utilization. .

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@cybertechie wrote:

@rajrocks

Your CIBIL score will take a hit. Credit utilization plays a vital role in calculating your CIBIl score. If you have used more than 70% of your credit, CIBIL thinks you are desperate for credit. Banks are also cautious to deal with customer’s who whose accounts are riddled with high credit utilization. .


thx bro
whoaaa
now im shit…
i have already done the deed!!! https://cdn2.desidime.com/assets/textile-editor/icon_cry.gif
anything i can do now. pls let me know?

kg

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@rajrocks wrote:

@cybertechie wrote:

@rajrocks

Your CIBIL score will take a hit. Credit utilization plays a vital role in calculating your CIBIl score. If you have used more than 70% of your credit, CIBIL thinks you are desperate for credit. Banks are also cautious to deal with customer’s who whose accounts are riddled with high credit utilization. .


thx bro
whoaaa
now im shit…
i have already done the deed!!! https://cdn2.desidime.com/assets/textile-editor/icon_cry.gif
anything i can do now. pls let me know?

kg


Pay off the amount before credit card statement is generated. You can also choose to partially pay the amount in such a way that Credit utilization stays between 40-60%. But make sure it is done before statement is generated.

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@rajrocks

I have a suggestion for you. If you make high value purchases often from CC, either get another CC and distribute the purchases keeping in mind credit utilization ratio or ask your bank to increase your credit limit.

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@cybertechie wrote:

@rajrocks wrote:

@cybertechie wrote:

@rajrocks

Your CIBIL score will take a hit. Credit utilization plays a vital role in calculating your CIBIl score. If you have used more than 70% of your credit, CIBIL thinks you are desperate for credit. Banks are also cautious to deal with customer’s who whose accounts are riddled with high credit utilization. .


thx bro
whoaaa
now im shit…
i have already done the deed!!! https://cdn2.desidime.com/assets/textile-editor/icon_cry.gif
anything i can do now. pls let me know?

kg


Pay off the amount before credit card statement is generated. You can also choose to partially pay the amount in such a way that Credit utilization stays between 40-60%. But make sure it is done before statement is generated.


bro. i think u misunderstood my Q.

see i have a credit card wth max credit limit of 40k ok.
now i wanted to make a transaction of 1lakh but as u see im in shortage of 60k.
so what i did is that i credited my credit card with 60k from my savnings acct.
now i have a total credit limit of 1lakh(40k by default credit card limit + 60k credit from my bank acct)
now i make a trxn of lakh.
so am in trouble?

sorry for the confusion.

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I dont think that should be an issue.

I did the same loaded +75 in my credit card limit to 1.5 which actually was half.

Made a smooth transaction with the amount.
Did the payment for 75 at the end of the billing cycle.
And got the cashback too. I used CITI.
AFAIK if you pay ur bills on time CIBIL is not effected. And next month I got a call from bank that I am eligible to increase my credit limit. https://cdn1.desidime.com/assets/textile-editor/icon_smile.gif

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@rajrocks

I understood your question, Bro. CIBIL will take into account credit limit set by ICICI.

Regarding your query, I believe your available Credit limit would be Zero now, right? If that is the case, effect some payment towards your CC so that available credit limit is ~ 20k( 50% credit utilization ). You can pay the rest after your statement is generated.

Above mentioned suggestion is only relevant if you are concerned about your CIBIl score going for a toss.

I would also suggest to speak to ICICI bank once to see what they have to say regarding it. I don’t know whether ICICI may slap some fine for exceeding credit limit.

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@farzimaal wrote:

I dont think that should be an issue.

I did the same loaded +75 in my credit card limit to 1.5 which actually was half.

Made a smooth transaction with the amount.
Did the payment for 75 at the end of the billing cycle.
And got the cashback too. I used CITI.
AFAIK if you pay ur bills on time CIBIL is not effected. And next month I got a call from bank that I am eligible to increase my credit limit. https://cdn1.desidime.com/assets/textile-editor/icon_smile.gif


exactly. this i what im talking abt.
i always make sure my bills are paid on time.
but wanted to know from experts over here.
kg

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@farzimaal

Credit utilization does indeed effect your credit score. I learned the hard way couple of years back when i had only one credit card. I ended up utilizing 90% of my credit limit for a high value transaction. My credit score took a hit of nearly 40 points. I have become wiser now & i carry 3 CC’s with combined limit of 10L. https://cdn3.desidime.com/assets/textile-editor/icon_lol.gif I end up using my cards in such a way now that only 20-30% credit is utilized at any point in time.

Reference :

http://www.nitinbhatia.in/personal-finance/low-...

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@cybertechie wrote:

@farzimaal

Credit utilization does indeed effect your credit score. I learned the hard way couple of years back when i had only a single credit card. I ended up utilizing 90% of my credit limit for a high value transaction. My credit score took a hit of nearly 40 points. I have become wiser now i carry 3 CC’s with combined limit of 10L. https://cdn3.desidime.com/assets/textile-editor/icon_lol.gif I end up using my cards in such a way now that only 20-30% credit is utilized at any point in time.

Reference :

http://www.nitinbhatia.in/personal-finance/low-...


https://cdn1.desidime.com/assets/textile-editor/icon_smile.gif

U got a valid point bro. It may be because I paid the amount before the bill was generated.
And yes its actually handy to card 2,3 cc at a time and then shuffling the transactions.

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@farzimaal wrote:

U got a valid point bro. It may be because I paid the amount before the bill was generated.
And yes its actually handy to card 2,3 cc at a time and then shuffling the transactions.


This is exactly what i was telling Raj to do. Pay the bill before statement is generated. If the bill is paid before statement is generated, then the question of credit utilization won’t even arise since CIBIL will not come to know about it.

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@cybertechie wrote:

@farzimaal wrote:

U got a valid point bro. It may be because I paid the amount before the bill was generated.
And yes its actually handy to card 2,3 cc at a time and then shuffling the transactions.


This is exactly what i was telling Raj to do. Pay the bill before statement is generated. If the bill is paid before statement is generated, then the question of credit utilization won’t even arise since CIBIL will not come to know about it.


thx bro. but statement already generated last month itself.
so to sum up or the thumb rule is.
before bill generation we need to keep max 70 % credit limit as bill no matter how we use like above situations like mine.
following above steps there wont be any negative marks on us.
i hope i am right.

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Only information about the monthly due(spent-paid) is sent to CIBIL, not the actual spend.

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@disclaimer wrote:

Only information about the monthly due(spent-paid) is sent to CIBIL, not the actual spend.


ru sure? if this is also the case then im in a bit trouble as im fully using 100% credit limit and paying just before the due date https://cdn1.desidime.com/assets/textile-editor/icon_sad.gif

John
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@rajrocks wrote:

@disclaimer wrote:

Only information about the monthly due(spent-paid) is sent to CIBIL, not the actual spend.


ru sure? if this is also the case then im in a bit trouble as im fully using 100% credit limit and paying just before the due date https://cdn1.desidime.com/assets/textile-editor/icon_sad.gif


Yes. The Total outstanding amount as per the statement is sent to CIBIL. It doesn’t matter how much you spend. If you settle the amount before the statement is generated it is fine. As per the statement, how much % you used will affect the score. To get good score, we need to have huge credit limit with less spends. To get more credit limit with banks, we need to spend huge https://cdn1.desidime.com/assets/textile-editor/icon_smile.gif

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@rajrocks wrote:

@disclaimer wrote:

Only information about the monthly due(spent-paid) is sent to CIBIL, not the actual spend.


ru sure? if this is also the case then im in a bit trouble as im fully using 100% credit limit and paying just before the due date https://cdn1.desidime.com/assets/textile-editor/icon_sad.gif


Well, i have even shared a link from a financial blog to explain how credit utilization impacts CIBIL score. If you are still skeptical, you can check your CIBIL score now and check again after a couple of months.

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@cybertechie wrote:

@rajrocks wrote:

@disclaimer wrote:

Only information about the monthly due(spent-paid) is sent to CIBIL, not the actual spend.


ru sure? if this is also the case then im in a bit trouble as im fully using 100% credit limit and paying just before the due date https://cdn1.desidime.com/assets/textile-editor/icon_sad.gif


Well, i have even shared a link from a financial blog to explain how credit utilization impacts CIBIL score. If you are still skeptical, you can check your CIBIL score now and check again after a couple of months.


i trust u guys.
my bad i didn’t read the link yet. was planning to do it later as its a bit lengthy. https://cdn2.desidime.com/assets/textile-editor/icon_toungueout.gif

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@john78

I still don’t understand how banks calculate credit limits. One of the oldest CC i hold has a very low credit limit. I have been holding that CC for many years but CITI has only enhanced the credit limit once. Spending on that card has always been quite high. All other cards which i got recently ( last 3 years)from CITI has very high credit limits.

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@cybertechie wrote:

@john78

I still don’t understand how banks calculate credit limits. One of the oldest CC i hold has a very low credit limit. I have been holding that CC for many years but CITI has only enhanced the credit limit once. Spending on that card has always been quite high. All other cards which i got recently ( last 3 years)from CITI has very high credit limits.


seems ur a citi fan. u hold all citi cards? https://cdn1.desidime.com/assets/textile-editor/icon_eek.gif usually ppl keep diff bank cards https://cdn2.desidime.com/assets/textile-editor/icon_rolleyes.gif

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@rajrocks

CITI works out great for me. Customer service is top notch compared to other banks in India.

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@cybertechie wrote:

@john78

I still don’t understand how banks calculate credit limits. One of the oldest CC i hold has a very low credit limit. I have been holding that CC for many years but CITI has only enhanced the credit limit once. Spending on that card has always been quite high. All other cards which i got recently ( last 3 years)from CITI has very high credit limits.


Spending is high
Means utilising > 65% ?
Is it so ?
That’s also one of -ve they flagged (probably)

But, I think ( amex agrees) spending does not matter if all dues paid b4 due dates, that shows the real sincerity if Cx holder.

John
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I use around 95% once in a while. But I do pay the total amount every time the bill is generated. I do not face any issues on my credit score or getting loads, etc. Once in a year the credit limit is getting increased by banks. I do see that the credit limits are not getting increased when we take EMI loan, Cash on call loan, etc.

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@rajrocks wrote:

@disclaimer wrote:

Only information about the monthly due(spent-paid) is sent to CIBIL, not the actual spend.


ru sure? if this is also the case then im in a bit trouble as im fully using 100% credit limit and paying just before the due date https://cdn1.desidime.com/assets/textile-editor/icon_sad.gif


You can check by spending more than credit limit once and repaying some amount due before due date. The max credit used by you will be less than the actual spend in that month.

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@cybertechie wrote:

@john78

I still don’t understand how banks calculate credit limits. One of the oldest CC i hold has a very low credit limit. I have been holding that CC for many years but CITI has only enhanced the credit limit once. Spending on that card has always been quite high. All other cards which i got recently ( last 3 years)from CITI has very high credit limits.


I think SCB gives 1.5x the credit limit of your existing card(max limit one). When the other bank increased the credit limit, SCB made it 1.5x again.

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@cybertechie wrote:

@rajrocks

CITI works out great for me. Customer service is top notch compared to other banks in India.


Keeping AMEX apart, but HSBC is also not behind.

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@[email protected]_0_0_D wrote:

@cybertechie wrote:

@john78

I still don’t understand how banks calculate credit limits. One of the oldest CC i hold has a very low credit limit. I have been holding that CC for many years but CITI has only enhanced the credit limit once. Spending on that card has always been quite high. All other cards which i got recently ( last 3 years)from CITI has very high credit limits.


Spending is high
Means utilising > 65% ?
Is it so ?
That’s also one of -ve they flagged (probably)

But, I think ( amex agrees) spending does not matter if all dues paid b4 due dates, that shows the real sincerity if Cx holder.


How is that spending ratio computed for charge cards?

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Spending ration and charge card has 2 difference.

1: no credit limit/ cash limit allocated to card holder in charge card.

2- no carry over of dues ia allowed in amex CX.

So, only internal ceiling is fixed fir at a point max. Outstanding , but it is comfortably high maybe equal to 6-10 times the monthly salaey .

So , spending ratio is not applicable in that case.

Missing