Business Differences Between Increasing Credit Limit & Upgrading Credit Card Volodymir BezditniyNovember 15, 2022076 views In this digital age, plastic money has become the most suitable financial tool to make a transaction, especially credit cards, when one faces a tough time with finances. Whether it is about an online transaction or offline, your best credit cards offer ready funds anytime at any place. Credit cards are offered with numerous facilities that benefit the users. One of these is upgrading the existing credit card. Banks offer customers an option to upgrade their credit cards or increase their credit card limit. An upgraded card can bring a more convenient world of making transactions. You can get interest-free periods, more rewards, discounts, and cash back. It should not be confused with the increased credit limit. These two are considered different aspects. An upgraded card comes with an increased credit card limit. Let us understand the difference between increasing credit limits and upgrading credit cards. Table of Contents The MeaningWhy One Look To Upgrading Their Credit CardsReasons to upgrade your Credit Card The Meaning Increasing Credit Limit: The credit limit on a card is the maximum amount that the cardholder can spend on using the credit card. There will be no charge for using this limit for online or offline purchases. The card issuer assigns the credit limit based on many factors, including the individual’s income, credit score, and spending habits. Banks can offer an increased credit card limit to the existing card if you have been a loyal and disciplined customer. A credit limit on a card increases your loan application approval chances if you need one because an increased credit limit signifies the customer’s reliable repayment track record. Upgrading Credit Card: A credit card upgrade means that the bank is launching a new version of the current card or coming up with a completely new product. The bank offers you a newly upgraded credit card, possibly with better features and rewards, without applying for a new card. The bank allows you to keep the existing credit account, but you will receive a new card. Why One Look To Upgrading Their Credit Cards With an upgraded card, the issuer generally increases the credit limit also. Generally, individuals want to upgrade their credit cards when their income increases. If you are looking for a new credit card after using your existing credit card for better rewards, a higher credit limit, ATM withdrawal without fee, or other facilities, you can find an option for an upgraded card. If you close your existing credit card account and then apply for a new one, it can negatively impact your credit score. The reasons behind the negative impact: Your credit history associated with the existing card will be deleted. You will not be able to show your creditworthiness to avail of a new credit card. The bank will run a hard inquiry when you apply for a new credit card, which negatively impacts your credit score. Thus, upgrading credit cards is the best move. If you did not get an upgrade offer from your bank, you could approach it to upgrade your credit card. Before approaching the bank or the card issuer to upgrade the credit card, the cardholder should consider a few important aspects. For instance, you should ask for a suitable upgrade on your card based on your spending habits to use most of its features. Also, an upgraded credit card may come with a joining fee and renewal fee. However, some banks can offer a waiver on annual or maintenance fees. Before accepting or applying for an upgraded credit card, you should do a cost-benefit analysis. Reasons to upgrade your Credit Card Enhanced credit limit: With an upgraded credit card, you can enjoy a higher credit card limit, depending on your spending pattern and credit history. Additional value on your spending: A card upgrade can benefit you with a wide range of offers, rewards, and cashback than earlier. Maximize your benefits with every expenditure. More Security: Upgraded cards prevent unauthorized use of your card. These cards are more secure with the latest methodologies. Exceptional Credit Score: Giving a boost to your credit score is one of the primary reasons for upgrading a credit card. Thus, credit cards are beneficial products as you make your daily transactions conveniently and can build your credit score considered good by financial institutions to grant a loan. Utilize the credit card with an increased credit limit or upgraded one wisely. If you want to read more informative content like this keep visiting MARKETGUEST.