Difference Between Upgrading Your Credit Card And Increasing Limit

A Credit Card comes with numerous advantages to benefit the user. However, when utilising a Credit Card, one needs to be mindful not to extend the card's credit limit. Many banks such as HDFC Bank offer the customer an option to upgrade their existing Credit Card or increase their credit limit. 

With this article, we take you through the differences between increasing credit limit vs upgrading Credit Card.  

  1. Meaning:

  • A Credit limit is a maximum limit or amount you can spend on your Credit Card without incurring a penalty or additional charges. The specific bank ascertains the Credit limit for the Credit Card offered. 

  • A Credit Card upgrade is when you upgrade your Credit Card with specific stipulations in question for better Reward Points, offers and promotions or increase your Credit Limit itself. A Credit Card upgrade occurs when the Bank launches a newer version of the current Card or a completely new Credit Card. 

  1. Aid During Emergencies

  • A Credit Limit increase helps during difficult times. In case there is a medical exigency or travel emergency with an increased credit limit, you can maximise the funds available on your Credit Card. If your credit limit is high, it saves you the trouble to borrow funds. Additionally, if you need to opt for a loan, a higher credit limit will increase your loan application process chances. 

This difference of upgrading Credit Card vs increasing Credit Card limit is an essential one to consider. 

  1. Multiple Cards

This difference between upgrading Credit Card and increasing Credit Card limit is significant because more the number of cards more the debt in the long run.

  • Increasing your credit limit on your Credit Card is better than having multiple cards. It offers you the advantage of owning a single card without the hassle to track various payments, maintain your credit score, manage your credit card ratio and pay the interest on time. With multiple cards and varied limits, your credit score gets affected if not managed well. 
  • In the case of upgrading your Credit Card, you may upgrade the credit card you current owe, in order to take advantage of the benefits that come with it. However, it may not come with an enhanced credit limit. In such a case, you may opt to use multiple credit cards even if you upgrade a single credit card. However, it is best to own not more than two Credit Cards to your name in order to maintain a well balanced credit score, and debt to income ratio. 

  1. Loans

  • With an increased credit limit, getting loans as a higher credit limit signifies that the customer has a safe, reliable track record. The increased credit limit results in a high credit score with on-time payments, and the customer can be trusted with money. Hence, when you apply for a loan an increased credit limit on your Credit Card offers you the lead for a quick loan process.

  • Whereas if you upgrade your Credit Card to enjoy the benefits that come with it, you will still need to maintain a clean credit record. In other words, if you risk default on payments or don’t resolve your previous bad credit history even with the upgrade, it will lead to setbacks when you apply for a loan in the future.

The difference between increasing Credit Card limit vs upgrading Credit Card is explained to you through this article. You can also read more about the benefits of increasing Credit Card limit here.

Apply for Credit card online and avail instant rewards and deals

So the next time you consider either of the two makes sure to keep in mind the choice that best meets your financial objectives. To increase your HDFC Bank Credit Card limit or upgrade your Credit Card, click here.

*Terms and conditions apply. Credit Card application and upgrading approval is at the sole discretion of HDFC Bank.