Don't do these 5 things with your credit card even by mistake, the bank can reduce your limit..

It is often seen that some credit card companies reduce the limit of customers' cards. Let us tell you that every bank has a practice of reducing the credit card limit. However, any bank does this only under certain circumstances. Let us know when a bank can reduce the credit card limit (How to Use Credit Card).

1- On payment default
If we look at the data of Reserve Bank of India, then credit card default has increased to Rs 4072 crore by March 2023. If you delay paying your credit card dues many times, then the bank considers you as a risky customer. It feels that you do not have enough money to easily repay the credit card dues and the bank reduces your credit limit.

2- Carry forward the outstanding amount by paying the minimum dues
Many people pay the minimum credit card dues and then carry forward their dues to the next month. If you do this two-three times then it is fine because in such a situation you pay interest on the outstanding amount, which earns money for the credit card company. But if you make it a habit then the outstanding debt will increase and you can get caught in the debt trap. In such a situation, it may be difficult for you to repay the loan, which is a big risk for the credit card company. In such a situation also, the companies reduce the limit of the customers' cards.

3- Using more credit limit than necessary
Many customers use their credit card limit more than necessary. The limit you get and the amount you use is called utilization ratio. If this utilization ratio becomes high, then also the credit limit can be reduced. Suppose you have a limit of Rs 1 lakh on your card and you are using the limit from Rs 80 thousand to Rs 90-95 thousand every month, then this is a negative point for you. Credit card companies consider such people as risky users and take too much credit or loan. In such a situation, many times the credit limit of the customers is reduced.

4. Using too much credit card
Sometimes some customers take several credit cards one after the other. This increases their total limit rapidly. Suppose the credit limit of one of your cards is Rs 1 lakh and you have a total of 10 credit cards, then your total limit becomes Rs 10 lakh. Now if you use these cards too much, then the bank will feel that you are too dependent on loans and are a risky user. In such a situation, the bank can reduce your credit limit.