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Old 04-05-2013, 10:07 PM   #41
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Originally Posted by jazz4cash View Post
None of my cards have monthly limits that I am aware of. The limits are on the balance. If I have 10 cards with a balance limit of 15K each, my total limit is $150k.
If I could ask another question . You have to settle card debts by a certain time, usually within a couple of weeks of statement date, otherwise you get hit with huge penalty interest. I presume you are paying of your cards in full.
If you are, then a $150k limit is the amount of credit you have in any one statement period, normally 30 days. So your monthly spend limit is $150k, or $2million a year
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Old 04-05-2013, 10:18 PM   #42
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When we were getting pre-approved for a mortgage, 11 years ago, the fact that I had $2500 or so in CURRENT credit card charges lowered my credit score (still had a very good score). Had I known, I would have not used a credit card for much if at all for that month so I owed nothing. I always pay it off in full every month but I get cash back from Costco Amex and points from SouthWest Air so I charge everything I can.

I remember asking why I had a lower score than my S.O. and it was because of the amount I had charged that month. I don't know if this is still considered but I think so.

I would just put down some arbitrary number like AGI or perhaps the amount of income off my investments - not necessarily income I took since I reinvest dividends and have a lot in IRAs. Let them challenge me. I have never been refused credit and I often take those stupid offers (well not SO stupid) that give me cash for opening an account. I then put the card in a drawer until it expires
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Old 04-05-2013, 10:42 PM   #43
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For income, I usually put close to whatever our tax return says our AGI was for the prior year. Of course you have to be over one whole calendar year retired for this to make sense.
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Old 04-05-2013, 11:44 PM   #44
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When we were getting pre-approved for a mortgage, 11 years ago, the fact that I had $2500 or so in CURRENT credit card charges lowered my credit score (still had a very good score). Had I known, I would have not used a credit card for much if at all for that month so I owed nothing. I always pay it off in full every month but I get cash back from Costco Amex and points from SouthWest Air so I charge everything I can.

I remember asking why I had a lower score than my S.O. and it was because of the amount I had charged that month. I don't know if this is still considered but I think so.
Yes, I talked about this earlier. It is because it is part of your credit utilization. Basically a credit report reports what the credit card company reports as your last balance on the card. Let's say you charged $2500 to Amex and Amex reports it. You pay it in full timely but the credit report just shows the last reported balance....they can't know you will pay it full. You might, after all, carry it as a balance. If the balance is less than 10% of your utilization on that card (would require a $25000 limit) and is less than 10% of your total credit utilization then it won't hurt you that much. However, if it is more than 10% it can hurt some and it hurts more than closer it is to the overall limit.

I always pay my Amex bill down to under 10% of utilization on that card before the bill closes every month. So, when we got a mortgage last year the reported balance was only a few hundred dollars although I had charged several thousand dollars during the month.
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Old 04-06-2013, 05:53 PM   #45
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Well I just applied for a new mastercard with USAA and got one with $13,500 limit to start. It took 5 minutes. I looked at my investments and saw what the estimated earning were (from the brokerage site) - it was a bit higher than my AGI so I used that number. I figured I could justify using that as an income number. Interesting experience after this discussion!
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Old 04-06-2013, 06:12 PM   #46
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Been retired for 6 years, got several CCs in that time. They look primarily at your credit report, and then ask what your income is.
I give the the amount of pension, etc. plus what my 5% SWR would be if I actually took that withdrawal. (After all, I could take it, I just choose not to.)

I've never had them ask me to prove my income. When they look at your credit report and see how many CCs you have and your history of 100% on-time payments for the last XX years, they don't have any reason to question your income as stated.

After I'd been retired for 5 years I got an AMEX with $5000 limit. Didn't care about the limit, using it got me a discount on something I was planning to buy.
2 days after paying the first bill ($150) I decided to buy some $6000 item, so I had to call AMEX from the merchant and ask for a $10,000 higher limit. Figured they might not want to do that, wanting to double my limit after using the card exactly ONE time.

They asked my income, I gave the the same number on the original 5-week old application. They put me on hold "to talk to a supervisor" for 1 minute, came back and said, "Done."

They always tell you about the great deal they have going for a balance transfer. Guess a lot of people jump at that, cause I always laugh and say "What balance? I don't have any balances to transfer." That always confounds them, they must be used to people who carry a balance on every card they have.
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Old 04-06-2013, 08:54 PM   #47
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If I could ask another question . You have to settle card debts by a certain time, usually within a couple of weeks of statement date, otherwise you get hit with huge penalty interest. I presume you are paying of your cards in full.
If you are, then a $150k limit is the amount of credit you have in any one statement period, normally 30 days. So your monthly spend limit is $150k, or $2million a year
Not sure what your question is. The card limit has nothing to do with what I spend. The CC company decides what amount of credit they wish to extend. I presume this is based on my credit history. They can see I am nowhere near my total limit.

I do not pay these off in full each month. I do pay off the ones with "standard" interest rates. I take advantage of reduced rate balance transfers whenever it makes sense to do so. The weighted interest rate for the cards with balances is around 5% so I am in not in a big hurry to pay these off.

Theoretically, I could spend up to the entire limit in a single month. The payment would be approx 2% of the balance ($3k on $150k). Then I could spend ($3k-interest assessed) the following month without exceeding my limit.
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Old 04-07-2013, 12:14 PM   #48
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Quote:
Originally Posted by jags View Post
If I could ask another question . You have to settle card debts by a certain time, usually within a couple of weeks of statement date, otherwise you get hit with huge penalty interest. I presume you are paying of your cards in full.
If you are, then a $150k limit is the amount of credit you have in any one statement period, normally 30 days. So your monthly spend limit is $150k, or $2million a year
You are assuming that everyone spends each month the entire amount of their credit limit. While my credit limits exceed $150k, for example, I don't spend $150k in a single month. I could, I suppose but I usually spend only a small fraction of that. Just because credit is available doesn't mean you have to actually use it. In fact, you have a higher credit score if you have lots of credit available and use only a small fraction of it as that shows that you are able to control your spending and don't go wild when you get higher limits.
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Old 04-08-2013, 11:59 PM   #49
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Not sure what your question is. The card limit has nothing to do with what I spend. The CC company decides what amount of credit they wish to extend. I presume this is based on my credit history. They can see I am nowhere near my total limit.

I do not pay these off in full each month. I do pay off the ones with "standard" interest rates. I take advantage of reduced rate balance transfers whenever it makes sense to do so. The weighted interest rate for the cards with balances is around 5% so I am in not in a big hurry to pay these off.

Theoretically, I could spend up to the entire limit in a single month. The payment would be approx 2% of the balance ($3k on $150k). Then I could spend ($3k-interest assessed) the following month without exceeding my limit.
Ok - I get it. It's a bit different in the US than here in Oz. Interest rates on unpaid balances can range fro 13 - 20%, and people who can't manage their finances end up paying through their noses.

On the other hand, all that easy credit in the US does not help the financially unsavvy pay off debt and save for retirement.
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Old 04-09-2013, 10:27 PM   #50
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Ok - I get it. It's a bit different in the US than here in Oz. Interest rates on unpaid balances can range fro 13 - 20%, and people who can't manage their finances end up paying through their noses.

On the other hand, all that easy credit in the US does not help the financially unsavvy pay off debt and save for retirement.
Actually, the standard interest on the unpaid balances for most of my cards averages over 20%....so I make sure they are paid off every month. I have some in the 13% range which I also pay off. The balances I carry average much less as I said before. Some credit card companies apply payments to the low interest balance first which means I cannot use those cards for any additional purchases. If they apply payments in this manner, it actually forces you to pay the higher rate for a longer period of time. Other cards pro-rate the payments which is a bit better.

Yes it is a game that can trap anyone that is finacially unsavvy or may not have a backup. My backup is a credit union account that charges 9% with no balance transfer fees.
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Old 04-10-2013, 12:32 AM   #51
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We never pay interest on credit cards, but we like the convenience and the cash back like most. We've just begun a full kitchen remodel, that will probably be paid for in three chunks, so I thought why not put as much as possible on the CC for the cash back.

So I called the CC folks and asked to increase our credit limit. Of course they asked what my income is, and since I have no pension or Soc Sec (yet), I have NO wage income. I was a little thrown, as I hadn't thought about it after more than 35 years with income. Fortunately DW still has a small wage income, and they increased the limit on that basis.

But when DW retires in the next year or two, we'll have NO income!

What am I missing, in terms of CC limits in case we ever want another bank CC? Denied for life, or until age 70 with Soc Sec
I am guessing you and your dear husband can keep getting credit-card limits raised even with both of you not having income (social security and/or pension).

Your credit scores matter. Your long-established histories. Your total assets (both you and your husband).
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Old 04-10-2013, 12:39 AM   #52
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Ok - I get it. It's a bit different in the US than here in Oz. Interest rates on unpaid balances can range fro 13 - 20%, and people who can't manage their finances end up paying through their noses.

On the other hand, all that easy credit in the US does not help the financially unsavvy pay off debt and save for retirement.
There are a hell of a lot of people who won't have a pot to piss in when they come of age for retirement.

That's not a problem in the collective minds of the credit-issuing financial institutions of the United States. Yes. For those who give thought to handling their credit cards very well by paying off their balances in full…you're an absolutely lousy, un-American consumer!
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