Nowadays, nearly everyone owns one or more credit cards. However, the limits granted differ considerably from one situation to another. Do you know the key elements for determining your Mastercard or Visa limit? Our explanation.
What is the reason behind this Mastercard / Visa limit? In addition to prevention against over-indebtedness, the main reason is to prevent any payment default from the consumer. With a higher limit comes a higher risk, and a greater unpaid amount in case of problem. For that reason, the maximum usable amount depends directly on the customer’s situation. This situation depends on the income, but on the risk as well. A “less-risky” situation will lead to a higher limit, and vice versa. In order to determine this “risk”, the financial institutions study various criteria.
The income of the applicant is the most important criterion when it comes to determine the maximum amount usable with the credit card. With a higher income comes a higher limit. For low incomes, the maximum amount can be as low as 1,000 Chf.
If most consumers ignore this fact, each Mastercard / Visa request involves a check with the ZEK. This centralized information datacenter records every information regarding loan and credit cards in Switzerland. Any payment delay could therefore be recorded to the ZEK. Financial institutions usually check for ZEK entries of any new applicant. Past problems could lead to a higher risk, hence a lower credit card limit.
Finally, some compagnies tend to favour good customers. If you want to rise your Mastercard or Visa limit without any improvement in your situation, a good history with your credit card company could lead to an acceptation.
One way to improve your credit history could be a debt consolidation loan. This solution can indeed help to avoir some bad credit history, allowing to pay all its credit card debts with a new personal loan:
In case of difficultues to repay a credit card amount, a debt consolidation loan can prevent a delay in the payment while saving on it’s interest, allowing to pay all the needed amount in one time.
Article written by Cashflex Multicredit