Credit Limit and Credit Status In most circumstances, the better your credit, the higher your credit limits will be.
Some credit-card companies will give you a big credit limit immediately, while some more conservative companies wait a few months of on-time payments before they give you a boost.
Generally speaking, those companies willing to take a higher risk by offering you a high credit limit from the go, will compensate the risk by charging higher interest rates for financing your balances.
Credit-card companies monitor your credit status constantly.
Although most companies limit credit increase to once or twice a year, they could choose to give you more increases based on your credit.
If they perceive that you are a good payer and that you can consume more, and thus generate more income for them, they will continue to increase your credit limit.
This can be extremely risky.
Good Credit, Not So Good? The bad news about having good credit is that you will continue to get credit line increases whether you can afford them or not.
Many financial analysts blame the credit card companies in part to the rising debt levels among Americans.
Many people have more available credit than they need or could ever repay.
Being able to purchase goods out of the rich of your income by using your credit card is very tempting.
However, the interest rates charged on credit card are probably the most expensive.
Thus credit card financing is a high-priced source of finance compared to personal loans or home equity loans.
Turning Down a Credit Limit Increase If you have a large amount of credit card debt, you need to ask the issuers not to give you any more credit limit increases.
The credit-card companies don't know your financial status.
They are just interested in knowing if you've made your payments on time.
Growing debt will eventually lead to default once you are not longer able to meet the minimum payments on your credit cards.
Turning down a credit line increase should just take a quick phone call to the credit card company.
You may have to follow up with a letter to make sure they actually change your limit.
Give them 60 days or so to do it and insist immediately if they don't.
Unless you have sufficient discipline, this is the only way to limit yourself to what you can actually afford.
Remember, when determining credit lines, card issuers have their bottom lines, not your best interests, at heart.
And issuers aren't shy about protecting their bottom lines.
So, if you don't protect yourself from the greed of lenders and from your own credit behavior, nobody will.
Some credit-card companies will give you a big credit limit immediately, while some more conservative companies wait a few months of on-time payments before they give you a boost.
Generally speaking, those companies willing to take a higher risk by offering you a high credit limit from the go, will compensate the risk by charging higher interest rates for financing your balances.
Credit-card companies monitor your credit status constantly.
Although most companies limit credit increase to once or twice a year, they could choose to give you more increases based on your credit.
If they perceive that you are a good payer and that you can consume more, and thus generate more income for them, they will continue to increase your credit limit.
This can be extremely risky.
Good Credit, Not So Good? The bad news about having good credit is that you will continue to get credit line increases whether you can afford them or not.
Many financial analysts blame the credit card companies in part to the rising debt levels among Americans.
Many people have more available credit than they need or could ever repay.
Being able to purchase goods out of the rich of your income by using your credit card is very tempting.
However, the interest rates charged on credit card are probably the most expensive.
Thus credit card financing is a high-priced source of finance compared to personal loans or home equity loans.
Turning Down a Credit Limit Increase If you have a large amount of credit card debt, you need to ask the issuers not to give you any more credit limit increases.
The credit-card companies don't know your financial status.
They are just interested in knowing if you've made your payments on time.
Growing debt will eventually lead to default once you are not longer able to meet the minimum payments on your credit cards.
Turning down a credit line increase should just take a quick phone call to the credit card company.
You may have to follow up with a letter to make sure they actually change your limit.
Give them 60 days or so to do it and insist immediately if they don't.
Unless you have sufficient discipline, this is the only way to limit yourself to what you can actually afford.
Remember, when determining credit lines, card issuers have their bottom lines, not your best interests, at heart.
And issuers aren't shy about protecting their bottom lines.
So, if you don't protect yourself from the greed of lenders and from your own credit behavior, nobody will.
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