Low-Credit Borrowers Use 'Exceeding Limit' Trick to Raise Card Limits

Attempting high-value purchases boosts limits amid tightened loan access for low-credit individuals

Yang, whose credit score is in the 700s, recently attempted to pay for a luxury watch worth 20 million Korean won. The reason he tried to purchase a watch beyond his financial means was to increase his card limit. Originally, Yang's card limit was only 3.5 million Korean won, and as expected, the payment for the watch was declined.

However, shortly after the payment was rejected, the card company sent a text message stating, "Your limit has been increased to 9.5 million Korean won." Yang said, "I needed to raise my card limit because I didn't have enough money to pay for hospital bills, and I heard that if you try to make a payment higher than your original limit, they often approve the increase. When I inquired with customer service before, they didn't raise it, but when I tried to purchase an expensive item, it worked immediately."

Among credit card users, this method of "exceeding the limit" is currently being shared as a tip to raise card limits. The idea is that if you repeatedly attempt payments exceeding your limit, the card company will increase it.

Another user, Jeong, also raised his limit by purchasing multiple TVs on an online shopping platform. Jeong said, "My card payment limit increased from 14 million to 16 million Korean won, and my cash service limit rose from 3.6 million to 6.4 million Korean won. My original limit was even lower, but by making high-value payments every two to three months, I managed to raise it to nearly 10 million Korean won."

Card companies explain these limit increases by stating, "We raise limits for customers whose credit scores, income, or delinquency status have improved, making them eligible for an increase. We do not grant higher limits simply because a customer attempts to purchase expensive items."

Meanwhile, analysts suggest that the spread of such methods to raise card limits is influenced by the tightening of emergency loans for low-credit individuals. Last year, the supply of loans to low-credit borrowers -- those in the bottom 20% based on KCB credit scores -- decreased by 11% to 30 trillion Korean won compared to the previous year. While the overall supply of personal credit loans decreased by 9.1% during the same period, the decline in loans for low-credit borrowers was more significant. Notably, banks reduced credit loans to low-credit borrowers by 500 billion Korean won.

It appears that low-credit individuals, facing difficulties in securing funds, are turning to increasing their card limits to meet their living expenses. The proportion of high-interest card loans and private lending in the total credit loan supply for low-credit borrowers expanded from 56% in 2024 to 58.3% last year.

Professor Lee Eun-hee from the Department of Consumer Studies at Inha University stated, "Even if card companies raise limits for customers who meet the criteria, the practice of increasing limits immediately after declining high-value payment approvals could lead to moral hazard and other issues. Since relying on card limits to secure funds can easily trap individuals in a cycle of debt, policies are needed to ensure that low-credit and low-income groups receive funds within manageable repayment limits and interest rates."