1. What is the Credit Card Limit Calculation?

The credit card limit calculation estimates your potential credit limit based on your current income and a multiplication factor determined by the bank. In Pakistan, this factor typically ranges from 2 to 3 times your monthly income.

2. How Does the Calculator Work?

The calculator uses the credit limit formula:

Where:

• \( Current\ Income \) — Your annual income in PKR
• \( Current\ Factor \) — Multiplication factor (typically 2.5 for Pakistan)

Explanation: Banks in Pakistan generally offer credit limits that are 2-3 times your monthly income, converted to an annual basis for this calculator.

3. Importance of Credit Limit Calculation

Details: Knowing your potential credit limit helps in financial planning, credit utilization management, and choosing the right credit card for your needs.

4. Using the Calculator

Tips: Enter your current annual income in PKR and the multiplication factor (default is 2.5). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the typical credit limit factor in Pakistan?
A: Most Pakistani banks use a factor between 2 to 3 times your monthly income, with 2.5 being the most common.

Q2: Can I get a higher credit limit than calculated?
A: Some banks may offer higher limits based on your credit score, employment history, and relationship with the bank.

Q3: Does this apply to all credit cards in Pakistan?
A: While the general principle applies, premium cards may have different criteria and higher limits.

Q4: How often can I request a limit increase?
A: Typically every 6-12 months, depending on the bank's policy and your payment history.

Q5: Will applying for multiple cards affect my credit score?
A: Yes, multiple applications in a short period can negatively impact your credit score.