Credit Card Blog

Many card holders are getting a nasty surprise these days: their credit limits aren’t what they used to be. Cards that were once considered a financial safety net might not be all that cushy anymore. The worst part is that these credit limit reductions can take card holders by surprise.

How can you keep from getting hit with the credit reduction whammy? First, always make timely payments – on everything. Credit card companies might penalize you with a reduced limit if you make even one late payment that causes a dip in your credit score. Also, keep a good debt-to-credit ratio on your existing accounts. If you go over your credit limit, you just might find that it gets smaller as your bills get larger.

Some people face falling credit limits through no fault of their own. Companies balk at extending high credit limits to customers who work in troubled industries, such as real estate or mortgage loan processing. And with upcoming legislation that will regulate the way credit card lenders can make changes to credit limits, some companies are hurrying to make changes now.

Protect yourself by being a good customer, making timely payments, watching your credit limit, and always reading the fine print when you sign up for any credit card.

Manila was tapped to be the pioneer market for the new Citi Mobile service, which allows mobile phone users to make purchases on their credit cards via text messaging or calls. Citi hopes that this new system will complement and, in some cases, replace the traditional card-swiping system.

Citi is marketing the new service to mobile phone users with busy lives. They encourage customers to call or text merchants through Citi Mobile when they need to send deliveries, pay bills, or load up on units for prepaid phones and Internet services. The purchases are then charged to the customer’s credit card.

This mobile banking system was launched in the Philippines because of the high volume of text messages Filipinos send each day. Some have called the Philippines the “Text Capital of the World”, and for good reason: Filipinos sent approximately 1.5 trillion text messages last year alone.

But markets all over the world will be watching to see how warmly Citi Mobile is received. If all goes well, you can bet Citi’s global offices will jump on the bandwagon and offer the service in other areas.

MoneySupermarket.com ran a survey and found that more than 4 million households had used a credit card (or a personal loan) to pay for their mortgage in the last year. 

More than 4 million households have turned to a short term, higher interest product, like a credit card, in order to make a payment on a lower interest, long term mortgage!

If you were one of the 4 million who did this to keep your head above water, you should definitely take careful stock in how you are spending your money.  You would probably be shocked at how much money you have available to you, if you cut back in certain, non-necessity areas.  Go through your check register and credit card statements to see exactly where your money is going, and anything you’ve spent that wasn’t an absolute “MUST” should be considered carefully.  You may be able to pay off credit cards and keep up with your mortgage if you  make some slight changes in how you spend your money.

The FICO credit scores are calculated using information about what kind of credit you have, how much of your available credit you use, and how you pay the debt you have. Oddly enough, it doesn’t care much about your income or where you work – just what you do with the money you borrow and how much of your available funds you have charged.

Most people hurt their credit scores by utilizing too much of their available funds. For example, if all of your credit cards combined have an available spending limit of $8,000 and you usually have about $6,500 in credit card debt each month, you’re using a large percentage of your available money and therefore your credit score is negatively affected by that.

One way to start raising your credit score using your existing credit cards, is to ask your credit card companies to raise your credit limit (without checking your credit report). If you’ve been making your payments on time, chances are the credit card company will do this for you. As you increase the amount of money you have available, and continue to pay down the amount of money you owe, you’ll see your credit score go up. Just be sure not to start charging more because you have more room on your card(s) to charge!

Are you in the market for a new or used (but new-to-you!) vehicle?  Sometimes, saving for a down payment is difficult- especially for people who are living paycheck to paycheck.  Having a reliable vehicle is important, though, so there are steps you can take now to help you come up with the down payment for a car later on – without it costing you anything out of your own pocket.

Many credit card companies have relationships with car makers, which means it’s only natural that credit card rewards programs would exist to help with the purchase of a car.  Basically, as you use the credit cards with auto rewards, you earn points or rebates that build up in your account.  When you are ready to purchase your car (even if you are going to be financing the vehicle rather than purchasing it outright), you can call the credit card company and have the rebates you’ve earned applied as the down payment on the car.