1. Under what circumstances is it easy to increase the credit card limit?

Kunpeng will first talk about the circumstances under which it is easy to increase the credit card limit. It will provide some reference for those who don’t know about credit cards.

Under normal circumstances, people who frequently use credit cards and can repay them on time will increase their credit card limit faster. However, the frequent use mentioned here also has certain restrictions. First of all, the credit limit must be large. If you can max out your credit card frequently, you will not be far from improvement. Secondly, having a large amount does not mean that you need to find a place. Just cash out. If such an operation is detected, the credit card will basically be useless. Large amounts also require consumption scenarios. At least you have to have a variety of ways to swipe your card, right? For example, when you swipe a credit card to buy furniture, go to a shopping mall, or go to a supermarket, the bank must analyze your credit card swipe records to see that you are a normal person spending money normally, rather than cashing out your credit card.

If you can meet these two conditions, basically increasing your credit card limit is not far away from you.

Or the questioner may have only seen others using their credit cards for large amounts, or even some arbitrage behavior, and mistakenly believed that banks like to increase credit card limits for people who owe money.

2. Why do banks like large amounts?

Kunpeng Lun mentioned in an article before that credit cards are one of the few products that banks can reach out to end users.

The bank is not its own money, but money borrowed from depositors, so the bank's money also has a cost and must be loaned out, otherwise the bank will lose money. However, due to risk control considerations, banks are generally more willing to lend money to enterprises, especially large enterprises and state-owned enterprises, because they have strong repayment capabilities.

Banks are least willing to lend money to individual users because they do not know whether the person can repay the loan. But here is a concept that everyone should understand. It is not that banks do not want to lend money to individual users, but that they dare not lend money out of fear that individual users may not repay the money. Therefore, when it comes to individual users, banks have a rather entangled mentality. On the one hand, they want to borrow, but on the other hand, they dare not.

Credit card users already have a certain credit record with the bank, and based on the cardholder’s usage habits and repayment status over a period of time, the bank will make a judgment about the cardholder. If it is judged that this person has The bank is willing to lend him more money due to his willingness and ability to repay, so increasing his credit card limit is the best way to lend him more money.

3. What kind of credit card users do banks dislike?

The first is those who fail to repay overdue payments. This is the user that the bank hates the most. Regardless of how much money the credit card has, the bank is directly connected to the central bank's credit reporting system. If someone overdue maliciously will still be listed in the central bank's credit reporting system. Therefore, Kunpeng Lun suggests that everyone should not do such a thing.

Swipe credit cards for small amounts. As I said just now, banks are more willing to lend money out, so for those users who want to spend only 30 yuan on their credit card in half a year, you are wasting bank resources, and the bank will definitely not like it. It is for this reason that basically all bank credit cards have a minimum number of card swipes per year before the annual fee will be waived. If you do not swipe the specified number of times, you need to pay the credit card annual fee.

Chief investment officer commentator Lemon believes that our bank is a commercial bank, and most of its actions are to increase the bank's profits.

1. Income composition of credit card business

Simply put, the income of credit card business is divided into three parts:

1. Card swiping fees

When we use credit cards to make purchases, although the bank does not charge us any additional consumption amount, it does charge a 0.6% handling fee on the money received from the merchant. For example, we bought a laptop for 10,000 yuan and paid with a credit card. The amount we paid was 10,000 yuan, but the final call to the merchant was only 9,940 yuan. And this 60 yuan will be collected by the POS issuing unit and UnionPay. In the end, it will cost more than 40 yuan to the credit card issuing bank.

2. Interest income

We all know that there is an interest-free period for credit card consumption, but using bank funds outside the interest-free period will cost very high interest.

The commonly used tactics used by banks include installment payment: if the consumption is 100,000, the monthly handling fee is 0.6%, the monthly repayment is 8333.33+600, and the maximum repayment is 12 installments, the actual annualized interest rate is approximately 13.034%, not to mention the installment fee of some banks reaching 0.75%.

The other is cash withdrawal: there is no interest-free period for cash withdrawal. Most of them charge interest at 0.05%/day of the cash withdrawal amount. This annualized interest rate even exceeds 18%.

3. Punitive income

Some people cannot repay on time, and late payment fees will be incurred. Generally, the late payment fee charges 5% of the unpaid portion of the minimum repayment amount, which is approximately the consumption amount. 0.5%, plus the interest originally payable, the annualized cost is super high.

As for the annual fee, most people can waive it, so it is not important to the bank.

2. The income that different card usage behaviors can bring to the bank

1. Normal use and timely repayment

If We consume on the billing day every month and repay on the repayment day, which is equivalent to obtaining an interest-free loan. The longest term can reach about 55 days (credit card of the four major banks). At this time, the bank can only earn money when swiping the card. Fees and annualized returns are only about 3%-5%, and banks don’t make money.

2. If you spend all your money, you can only pay in installments

I don’t know if you have this experience. After using a credit card to make a large purchase, the bank will call you soon. , advise you to repay in installments, and pretend to offer various discounts. If you agree, you will have to bear high interest rates of 13%-17%, which is the bank's most important source of income.

3. The installments are not enough and often overdue.

Installment payment only pays more interest, but overdue payment is different. In addition to high interest, there are also late fees, which will also affect your credit report. , you won’t be able to get a loan to buy a house or a car in the future, and the bank will make super high profits by taking the money back.

4. If you paid based on your ability, why should you pay it back?

If the card user really fails to repay the card, it becomes a bad debt for the bank. Not only does the bank not make any money, it also loses money. Of course, card users will also be thrown into the street, and banks will use various methods to collect debts, and their lives will be restricted everywhere.

3. Inspiration from ordinary people using credit cards

Banks like to increase credit limits for people who owe money. The purpose is to let these people max out their cards and then choose installment. As ordinary people, we only buy a certain treasure with an annualized return of 4% for financial management. Using funds with a bank interest of 15% is not worth the gain.

A large credit card limit is not necessarily a good thing. It is best within the range of our repayment ability. After all, if the bank does not make our money, it means that we make the bank's money.

This question is a bit technical. People who don't understand are prone to making mistakes.

Banks like to increase credit card limits for people who owe money because the people who owe money have good repayment records, so that they have a good credit record in the bank. People with good credit records , then the amount of borrowing through credit card will also increase, which is the right way.

Like all economic activities, only circulation can create new value. For bank credit cards, only if users use them frequently can they create more economic benefits.

Because the more you use it, that is, the more you borrow, the more revenue the bank can get. In this way, the credit card can really create good revenue for the bank. If users do not use credit cards, then credit cards are just a decoration for users. For banks, this increase in the number of customers will not bring revenue.

The people who owe money are those who frequently use credit cards. Because these people use it frequently, they have a good understanding of credit cards and are often able to pay off their debts in a timely manner, which brings huge traffic. This kind of traffic can easily create value for banks.

Because they often borrow money and are able to repay on time, the credit of this type of customer will naturally improve in the bank. Because credit card credit is accumulated through customers’ continuous use and repayment.

Of course, this kind of frequent use is not just about buying a pack of cigarettes or a bottle of water, but more often when customers purchase large durable goods, such as color TVs, refrigerators, etc. Large-ticket consumer goods such as furniture. This makes it easy to increase users' credit card consumption, because the expenditures are used for household expenses. If you go to a casino to swipe your credit card, your credit limit will not increase so quickly. This also has a lot to do with the consumption scenario of credit cards.

All in all, credit cards adhere to the bank's "icing on the cake" concept, rather than "giving help in times of need", and they are also "depending on the person".

Because the people who owe money at least represent credit cards that are often used by banks.

For a bank to increase the limit of a credit card, two conditions need to be met. One is that the cardholder has demand, and the other is that the cardholder can afford to pay back.

How to determine who needs a useful card? Those are the people who use credit cards frequently. When banks issue credit cards, they usually don't even charge a fee and give away the card for free. However, banks don't want cardholders to treat the card as a decoration and not use it, so they come up with various promotional methods to give away the card. Points and various welfare activities encourage cardholders to use credit cards.

People who owe money like the questioner mentioned are people who often use credit cards. Whether it is consumption or cash withdrawal, as long as you use the card, it is a good thing for the bank. When cardholders swipe their cards to make purchases, the bank can receive handling fees from merchants; when cardholders withdraw cash, banks can charge handling fees. There are also various installments and minimum repayments, so I won’t list them one by one.

Second, cardholders can afford to pay back the money. How does the bank determine whether the cardholder has the ability and willingness to repay? This is the credit card repayment record. Check to see if the cardholder has ever been overdue or defaulted on payments. If it is a deliberate delay in payment, there is no need to think about raising the amount. If there is an overdue payment, the bank will feel uneasy and it will be difficult to raise the amount.

Therefore, just owing money to the bank does not allow the bank to increase your limit. Not only do you owe money, but you also need to have a good credit record and good quality to make the bank think you are a quasi-adult. This is the main target group for banks to raise their credit limit.

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Banks issue credit cards to make money, not to give you free use. They are also credit cards with a limit of 20,000 yuan. One person only uses 200 yuan per month, while another person uses them every month. It will cost about 15,000. At this time, if you were a bank, who would you be willing to increase their credit limit?

Even these people do not pay in installments. The first person earns about one yuan for the bank every month, while the second person earns about one hundred yuan for the bank every month. Of course, the bank likes the second person. Personal.

If there is a third person, this person will use up the 20,000 yuan quota every month. In this case, the probability of the bank increasing his credit limit is relatively small. Because he is most likely still using other banks and using credit cards more often, this person's repayment ability will be problematic.

Therefore, it cannot be generalized. Banks do not like to increase credit limits for people who owe money. Instead, it increases the credit limit for those who are able to repay and like to use their cards frequently.

Some time ago, CITIC Bank issued an announcement that if your credit card has no transactions for six consecutive months, the limit may be reduced.

Banks don’t like to provide credit extensions to people who owe money. Instead, I like to give credit raises to people who often owe money and are never overdue.

The bank’s idea is very clear. If you can't even use half of the quota given to you, what kind of quota should I give you? Waste of resources. Right?

Secondly, your arrears are relatively loyal to this bank. Why do you owe money to so many banks? Why don't you use other cards?

In addition, some people who owe money will pay the minimum payment or installments, causing the bank to earn late fees or interest, as well as card processing fees. Of course the bank likes it.

So the more frequently you use your credit card and the more you spend, the more the bank will like it.

My answer is that I never look up information, I just talk about experience. I have another credit card that I have used for 13 years, and I renewed it once when it expired. I have never had any bad records, and my repayments are on time, even ahead of schedule. My credit has always been good, but I have never been given a fixed limit increase. When the bank gave me reasons, it encouraged me to visit more physical stores, and I have always paid online. Therefore, if you want to increase your credit limit, you not only need to pay more than you owe, but you also need to pay more entities.

Only if the limit is higher, the amount is spent more, and the payment is not paid at once, can the bank make more money from people who use credit cards!

Banks like to increase the credit limit for people with relatively high consumption limits. On the one hand, it is based on past repayment records, and on the other hand, based on consumption conditions. If regular consumption is close to the limit and the past repayment record is good, the bank will take the initiative to give You raise the limit, and you can also temporarily increase the limit during consumption peaks.