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Credit Card Limits???!

Discussion in 'Money Management' started by Johny_come_lately, 5th Aug, 2010.

  1. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    Hi,

    An Extra-ordinary situation resulted in my credit card being pushed to the max.... or so I thought. The balance went from 0.00 % to 93.8% with two transactions. When I approached my bank, they said they had Automatically increased my credit limit by 40%. But I don't want a higher limit! The reason I chose my old limit was to protect myself from unwanted debt.

    Do all banks raise the limit? By how much? When does a bank bounce a card? At what point do they say 'no'.





    Johny.
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
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    Location:
    Sydney, Australia
    I think it is completely wrong and irresponsible for a bank to automatically increase your credit limit without your approval.

    The thing is that probably 75% of credit card users will actually appreciate the increase - the bank probably thinks it is doing you a favour.

    I would contact them and request that they restore the previous limit and don't automatically increase it in the future.

    Higher credit card limits can adversely affect your ability to get finance for things like housing loans, so you really only want a limit as high as you need (but make sure you pay it off in full every month either way).

    I know my bank offers to increase our limit regularly, but I have to actually send in the request to make it happen, which I never do.
     
    Dean Collins likes this.
  3. MrsPlatten

    MrsPlatten New Member

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    26th Aug, 2010
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    Location:
    SA
    I currently work in one of the major banks and I find that appauling. We could never 'automatically increase' a limit .. it is offered to the customer then increased. Contact your bank and have them lower your limit, and I would also make a complaint.
     
  4. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    The reason I got my credit card, years ago, was a trip to Disneyland. I put my holiday cash into the card (this was before debit cards). I chose a card with points and flybuys. Since I was using my own money, I didn't care about the interest rate being the highest.

    Every year my bank(at the time) sent me a letter. These proposed my credit to be increased by $1000.00. "Oh" I thought, each time. I'm not using my card. It'll be good for my credit rating. So I said 'Yes'.

    A decade went by. I had a huge credit limit on the card. Still didn't use it.

    Then a family tradgety struck. I didn't have the cash. Used the card.

    Then an event happened, that needed payment immediatly. Used the card.

    I used my entire credit limit.

    I payed off the minium payment each month.

    Treading water, I tried to get ahead. I was unemployed, so I sold my car. I made a tight budget. Could not get ahead! I found the interest by itself too high. I could not pay my elec. bills and I was eating home brand noodles.

    To my immense relief a relative payed my debt off. I got a new (budget) card with the lowest interest and lowest rating and no points. I use it very rarely and pay it off every month.

    My (current) bank must want me to get into debt again. I told them that I didn't want more credit. I have learned my lesson, big time.



    Johny. :)
     
  5. Johny_come_lately

    Johny_come_lately Well-Known Member

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    Location:
    SE Queensland
    Having a high credit limit doesn't improve your credit score. If I have a $3000 limit and want a $150k mortguage or, I have a $50k limit and want a $150k mortguage; which will a bank be happier with? They will choose the $3000 limit as it is less risk to them.



    Johny.
     
  6. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
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    Location:
    SE Queensland