If you are considering asking your credit card company for an increase on your credit limit, it’s important to know when you should and should not do this. Asking for a credit limit can actually help you in some situations, while hurt you in others. Read about each situation to decide what you should do!
Scenario #1
You’ve nearly maxed out your credit card and your car just broke down. You have no cash on hand and you’ve tried to borrow money from friends. You decide to ask for a credit limit increase so you can get your car working so you can make it to work.
Scenario #2
You’ve made some bad decisions when it came to buying things with your credit card. However, you’ll stop spending as soon as you buy these new boots you saw on sale. All you need is a little more money on your card and you will be through with it. You decide to call for the credit limit increase to buy the boots.
Scenario #3
You aren’t anywhere close to your credit limit but you’ve heard that having good debt to credit ratio (having more credit than debt) can help you when it comes to buying a home or getting a loan. You decide to ask for a credit limit increase to increase your credit to debt ratio.
Scenario #4
You’re trying to pay off your debt and want to transfer your balances to a credit card with a lower interest rate. However, that credit card has a small credit limit. You ask for a credit limit increase so you can transfer all of your balances to that one card to save money on interest you would have to pay on the other cards.
As you can probably guess…scenarios 1, 3 and 4 are the best reasons to increase your credit limit. Which scenario do you fall into? Is it wise for YOU to ask for a credit limit increase?
(Photo Credit: http://www.flickr.com/photos/nate/500486913/)
July 13th, 2009 by Marcelina Hardy | Posted in Credit Cards | Comments (0)
You would think in this economy, credit card companies would make it easier to pay on your credit card rather than making it an additional financial stressor. Chase has recently announced that their credit card holders will be required to pay 5% of their balance as opposed to the 2% card holders have been paying for a minimum payment. Chase has also added a fee to individuals who have a low interest rate of $10 a month.
The reasoning behind the change is to help card holders who have had been paying but not making an progress in lowering their balance. How nice of Chase to think of the debt of their consumers, however, it’s not all selflessness that drives this new minimum payment requirement. If it were, Chase wouldn’t add a fee for individuals who have been paying on their cards with no problem. With this increase, these same people who had no problem paying on their cards before, may not be able to make it. What this means, is Chase may see an influx of people missing payments, which means late fees and more money for them.
What can you do if you are a Chase credit card customer? You can transfer your balance to a non-Chase credit card company. You may have to pay a fee but you will make up that fee if you are able to get a lower interest rate and not have to pay the $10 a month.
If you are unable to transfer your balance due to poor credit, call your Chase credit card company and explain your situation. Chances are, they are still going to work with people who are having financial problems paying on their credit cards. You may be able to come up with a minimum payment per month that works for you and is not the 5% they are requiring. However, this is on a case-by-case basis and most likely will depend on how well you’ve been able to keep up on your payments. In any case, it doesn’t hurt to call and ask!
(Photo Credit : http://www.flickr.com/photos/woodpool/2476522151/)
July 1st, 2009 by Marcelina Hardy | Posted in Credit Cards | Comments (0)
If you are looking for a good way to build credit from either no credit or bad credit, getting a prepaid credit card may be your answer. Opening up a prepaid credit card account is easy. You simply apply just as you would like a regular credit card. The difference is that you won’t have a problem being accepted as you would with a credit card since you’ll be using your own money.
Once approved, you will deposit money into the prepaid credit card’s account. Then you are free to use your card anywhere that accepts regular credit cards. You can use it to book airfare, hotels or just regular purchases at a store. The only difference is that you are using cash rather than credit, which means you stay out of debt and show creditors that you are being financially responsible.
One of the biggest disadvantages of prepaid credit cards is you will have to pay a fee every time you deposit money into the account. You also will have to pay a fee for every time the card is used. It’s a lot like using an ATM that isn’t associated with your bank and you have to pay a fee each time you use it. These fees can add up but if you think about the cost of debt, the fees don’t seem so bad after all.
The other disadvantage is that not everyone will accept a prepaid card because of fear that you won’t have enough funds on the card to pay for what you are purchasing. This is usually the case with pre-authorizing something because they want to make sure if you don’t follow through with a reservation, you’ll have money on the card to pay for the penalty.
What are some of your experiences with prepaid cards?
(Photo Credit: http://www.flickr.com/photos/ingorrr/355584016/)
June 8th, 2009 by Marcelina Hardy | Posted in Credit Cards, Debt Management | Comments (0)
Find out how to use your credit card responsibly so you don’t add to or fall into debt.
Many people have a negative perception of credit cards. They fear their ease of use and its temptation to purchase more than what they can afford. However, there are ways to use a credit card effectively so that you don’t have to fear its use or overspending.
Ignore Your Limit
When you are approved for a credit card, the first thing you find out is how much you’ve been approved for. This limit is the amount that the credit card company trusts you will be able to pay back if you indeed use all of it. However, this amount is also how much they would like you to spend because if you can’t pay it off in one month, they will charge you a finance charge or interest. This is how the credit card company makes money. Therefore, instead of giving a credit card company your hard-earned money, forget about the limit. You should never see your credit card as a large sum of money in your pocket.
Pay For What You Buy
One of the reasons why people sign up for credit cards is because of its convenience. It’s much easier to carry around a money card rather than going to the ATM or running the risk of losing cash. However, while a card may not look like cash, you should treat it as such. If you are a financially responsible individual, you should know how much money you have in your checking and savings account. When you choose to purchase something with a credit card, deduct that amount from one of your accounts and at the end of the month, take out that money to pay your credit card off. This way, you have the convenience of card as well as the control over only spending as much as you have.
Pay attention to your shopping personality. If you tend to overspend when you are angry or really happy, leave your credit card at home. Impulse buying due to your emotions will only propel you into a pool of debt that you may not be able to get out of easily.
What are some of your tricks with using credit cards responsibly?
(Photo Credit: http://www.flickr.com/photos/zoovroo/3025062786/)
June 3rd, 2009 by Marcelina Hardy | Posted in Credit Cards, Debt Management | Comments (0)
Whether you’re the CFO of a Fortune 500 company or just wondering how to switch to online banking, the world of finance affects is all in some way. Keep on top of the latest information on handling your money, investing wisely and industry news in our iFinance blog.
Identity theft, one of the fastest-growing crimes in America, can happen to anyone. After an identity theft, it can take years to regain your name and get your credit back into good standing. That’s why we’re providing a blog on Identity Protection- to keep you informed on ways to protect your identity every day.
Aside from health, car and life insurance, increasingly more Americans are spending money to insure their computers, their pets–even expensive accessories. But how much should you really be spending? Our Insurance blog is here to help you navigate the world of insurance, which may be your most important investment. We’ll help you figure out what you should be insuring—and how much is too much.
If you’re thinking about declaring bankruptcy, you’re not alone—more than one million Americans did just that in 2008. Our Bankruptcy blog is here to help you navigate this overwhelming process and help get you back in control of your finances.
If you run a small business, you know how many things you have to juggle at once to keep afloat. Our Small Business blog is here to help entrepreneurs like you discuss challenges, share tips and insight, and provide the latest news on running a small business in today’s economy.
May 12th, 2009 by admin | Posted in Credit Cards, Debt Management, Saving Money | Comments (0)
Loading ...
