Credit limit to income ratio

abhimarda

KF Mentor
What! who told you that. My father have almost 5 times the income as credit limit and that too from SBI. Do not spread misinformation
So you are saying your father has credit limit of 5 times than his Annual income? Eg. Annual income 10 lakh and card limit 50 lakh? Looks highly improbable to me
 

nightcode

KF Rookie
So you are saying your father has credit limit of 5 times than his Annual income? Eg. Annual income 10 lakh and card limit 50 lakh? Looks highly improbable to me

Did I say Annual anywhere? Use some common sense—'income' here clearly refers to monthly income. If the OP actually meant 'Annual Income,' he should have explicitly stated it. Don't assume things that aren't mentioned!
 

abhimarda

KF Mentor
Did I say Annual anywhere? Use some common sense—'income' here clearly refers to monthly income. If the OP actually meant 'Annual Income,' he should have explicitly stated it. Don't assume things that aren't mentioned!
I have full common sense and I also know how this ratio is calculated but it seems you are ignorant of the same else you would not have said that. The leverage is calculated taking into account the credit limit across all the credit cards a person has against his/her annual income. Having a limit of 5 times of someone's monthly income is very common and most of the banks give that individually even when someone has other cards. When someone has credit limits which are more than their annual income that's when banks start having issues in some cases..in case of high incomes most of the banks ignore that as well as they also see usage but likes of SBI may reject.
 

zacobite

KF Mentor
What! who told you that. My father have almost 5 times the income as credit limit and that too from SBI. Do not spread misinformation
what he says is true.. some banks consider that as OVER LEVERAGED.. SBI is famous for this.. however its not a rule.. there are many factors.. so may not literally apply to all cases!! 🐨
 

nightcode

KF Rookie
I have full common sense and I also know how this ratio is calculated but it seems you are ignorant of the same else you would not have said that. The leverage is calculated taking into account the credit limit across all the credit cards a person has against his/her annual income. Having a limit of 5 times of someone's monthly income is very common and most of the banks give that individually even when someone has other cards. When someone has credit limits which are more than their annual income that's when banks start having issues in some cases..in case of high incomes most of the banks ignore that as well as they also see usage but likes of SBI may reject.
oKay,,.. Wasn't aware of the ratio thing, but now I do. My sincere Apologies.
let's stick to the OP's question. Safe Ratio>?
 

zacobite

KF Mentor
Currently, my credit limit is four times my income. Is this safe?
Which is a safer ratio
nothing called safe.. safe for / from what?? Having higher ratio is not a negative for anything.. however some banks may not issue further cards as OVER LEVERAGE.. And if you apply for too many in a short span may appear CREDIT HUNGRY!!
 
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