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The evils of Credit Card spending limits

Joey.E.CockersMommy
September 18th, 2005, 08:28 AM
Just a rant :)

Right now I am trying really hard to pay off my credit card that I shouldnt have gotten in the first place. The offered it to me when I was working at a job that paid me 60 bucks a week. Which I told them and they didnt seem to care, I kick myself now for getting it.

anyways they offered me a Gold Travel Visa so I could collect airmiles which initially I thought was a good idea in the end the credit card was maxed and all I got was a flight to Vancouver and back home (45 min each way)

Enough I thought so I called the company and requested another card with a lower interest rate which they gave me. So now I have been putting down as much as I can on it every month to get the balance down. Last night I called the automated system just to check my balance and they raised my credit limit by 2000 dollars, as far as they know I am still making 60 bucks a week why do they do this? I asked the customer service rep if I could lower it back down, for me this is to much of a temptation there is definaltey things I could use that extra credit for. Now I have to wait to Monday to call them back and lower my limit again. Hopefully this will not affect my credit rating by doing this.

Sorry for rambling on

Puppyluv
September 18th, 2005, 09:11 AM
I hear ya! I don't even work, I'm a student, and the only reason I accepted the credit card they offered me in the first place was to pay for things like plane tickets home, orbirthday presents for family members backhome.
Anyways, the credit card company keeps raising my limit on me. It's four times what it started as, and it drives me nuts! I called and asked them to lower it, they said they would and never did! Arrrggh
:evil:

Rick C
September 18th, 2005, 09:24 AM
Last night I called the automated system just to check my balance and they raised my credit limit by 2000 dollars, as far as they know I am still making 60 bucks a week why do they do this?

Because you're dependable and reliable . . . . its the curse you must bear. :thumbs up

You were wise to lower the limit again and keep it affordable. It shouldn't impact your credit worthiness.

Credit cards can be really harmful to people. There's an element of the population that is simply not psychologically wired to handle it and will always have their cards maxed, almost regardless of the spending limit.

Rick C
www.goldentales.ca

raingirl
September 18th, 2005, 09:36 AM
Every time they raise mine, I call and ask them to lower it. In UNiversity, I had to use my credit card to survive because I couldnt get enough loans or make enough money part time to survive. It was sad, but it was my only choice. I am still paying off that debt. But as soon as I graduated and had a job for 6 months, I went to the bank, got a loan for the debt on the card for a much cheaper rate than the card, got a new lower interest card, and lowerd my limit to $500.

I suggest that if you have a large amount of debt on it, go to the bank and ask for a loan to pay of the card, which will be a lower rate than the card itself, then call the company and ask them to put it at the lowest they will allow (some will allow as low as $100). Make sure it's low enough that if you use it that month, you can pay it off 100% that month.

StaceyB
September 18th, 2005, 09:44 AM
They know how much you make. Whenever you come up to a review for increase time they will check with the credit bureau before they increase.

PetFriendly
September 18th, 2005, 10:07 AM
And most places will stop increasing it if you call. If they don't stop cancel their card and get a different one. There's enough to choose from, and since you have good enough credit for them to be raising your limit, then it should also be good enough for another company to issue you a card.

Writing4Fun
September 18th, 2005, 02:03 PM
LOL! Yeah, whenever our credit card companies ask if we want to raise our limits, hubby and I have a good laugh translating the conversation. For example, "Would you like to raise your limit, or would you prefer a second card?" translates into "Would you like me to help you with that slip-knot around your neck, or would you rather I help by kicking the chair out from under you?" :p

I agree with PetFriendly - if your current company isn't listening to you, get another card and cancel the current one. That'll get their attention. ;)

Prin
September 18th, 2005, 02:20 PM
They offer the people in not-so-good financial stability cards because if you are a good girly and you pay off your bill entirely every month, they don't make any money (except from the retailers, of course). If you pay wads and wads of interest every month, then they'll love you. :)

Cinnabear
September 18th, 2005, 05:05 PM
So true Prin, they want those who don't pay the entire balance off because of the interest.

All I can say is try and find a lower interest card. That helps to pay off the balance faster.

dogznfish
September 19th, 2005, 12:24 PM
May I recommend that you call your credit card company and ask them to put a freeze on raising your credit limit. Leave it at an acceptable limit (for you) and then they will no longer automatically increase it.

My credit card kept increasing my limit and since I don't pay much attention to the limit, just what I have to pay, I was totally shocked when I actually looked and it was over $20,000 for a credit limit! The downfall is that those kinds of limits COUNT AGAINST YOU when you need to apply for bank loans, mortgage, etc. It falls under your debt load ratio.

Same for cards that you no longer use or have only used once or twice. Might as well cancel them, those limits count against you too. Even though you may only have a couple thousand limit here, another couple thousand there, no balance owing, all the bank sees is that you can potentially spend up to that limit.

Also, you can go to www.equifax.ca or http://www.tuc.ca/ and request through either email (pay) or through snail mail (free) credit report. I request mine every fall and check the activity and for any wrong entries.

Dogastrophe
September 19th, 2005, 12:49 PM
Same for cards that you no longer use or have only used once or twice. Might as well cancel them, those limits count against you too. Even though you may only have a couple thousand limit here, another couple thousand there, no balance owing, all the bank sees is that you can potentially spend up to that limit.



Cancelling cards requires a bit of finesse as reducing your avail credit quickly can also affect your credit. You really need to reduce your debt in conjunction with a reduction in your avail credit. In a nut shell, many finanicial institutions will look at the ratio of credit used to credit available. If you have $5k owing on your cc's and $20k in avail credit, then your ratio is 0.25 (which is ok). If you cancel all your cards to reduce the amount of credit avail, leaving say $5k owing on a card with a $5k limit, then your ratio is 1.0, which is bad. It's really a Catch 22 situation. You get hurt when you have too much credit and when you reduce your avail credit. (note: this ratio is looked at as part of the credit score i.e. FICO, and is more applicable to the US than in Canada, however, it is still generally looked at here).

Prin
September 19th, 2005, 01:48 PM
You could also show some restraint. Just because money is readily available to be spent, doesn't mean you have it. ;)