by Tricia
I’ve been hearing buzz about credit cards lowering credit limits. It makes sense they are trying to reign in all that available credit floating around out there. That is why I was so surprised to get a letter in the mail stating that my credit limit was increased.
I haven’t requested it so I do find this increase odd. The only reason they gave for the increase was that we were great customers. Hmm…it really is odd timing. About a week ago I found myself starting at the LCD TVs again and found one that was really pretty. Maybe they were spying on me and the credit limit increase is to try to lure me into buying one LOL.
Or, they noticed that we used to have a balance and only paid the minimum. Maybe they are trying to get the “great customer” back.
All I know is that I am going to be so glad when it’s time to start closing some cards. It’s not because of temptation, it’s just because I’m tired of them. They are no longer the friends they used to be.
This happened to me as well. Any chance it was a Discover card? That’s what mine was. I was surprised because I have had three cards decrease my limit – and two cards flat out cancel my cards due to inactivity in the past six months. Wonder what’s going on…
understand the TV thing, we bought a new one last year (cash!!) We all struggle with blancing thrift with enjoying life. You’ve held out this far I would make the TV a reward once your last CC debt is gone. If memory serves me correct it’s only a few months away.
ps it is really nice
I have a credit card. My personal income is about 22 000 a year and they offered me a $18 500 limit. Are you kidding me??
Ha, funny how they do that. Everyone else is getting their minimums increased from 2% to 5%, accounts being closed, limits being dropped causing over the limit fees.
I swear they have sixth sense about people who are going to ditch their credit card. I wouldn’t be surprised that if in a week you receive a balance transfer offer to go alongside that increased limit.
Those punks are evil.
Tricia,
Stay away from those “punks”! You are doing great…you are a great inspiration to us all and you are SO CLOSE TO BEING ABLE TO TYPE IN ……ZERO DEBT……..DEBT FREE!! I can’t wait until I can say that! It is YEARS away, but I am reading through your archives and taking your journey as my own. Have a great day! I just found out about “blogging” and your site is the BEST! Thank you for opening up!
OOPS..I meant PHIL 4:13!! It’s still early!
The exact same thing has happened to me with two of my accounts and it seems like I get a book of their “checks” at least twice a month now.
I completely agree with you – I think they are targeting me b/c of my past. They know that I am a “recovering credit addict” and they are well aware of the damage I can cause w/ the plastic. It doesn’t seem like they are buying into my new debt-free lifestyle and are trying to get to me to fall off the wagon. They miss the old Kev and want him back. It’s not going to happen. I’m also extremely tired of them and wish they would just leave me alone. They are no longer the kind of friends that I want to associate with.
Am I wrong to think that you shouldn’t close your credit cards because it negatively affects your credit score? keep them open, just don’t use them. I think suze orman taught me that…
You’re mostly right about the card companies. They do “spy” on you through careful data analysis. You’re wrong on one count though. They aren’t lowering credit limits in order to reign in available credit. They are doing it to cause more fees to be incurred by people who they know will have trouble.
rob in madrid – don’t tempt me…the one I saw was really, really pretty 🙂
deirdre – we won’t be closing all of them. Our credit score will likely take a hit, but it should rebound after a while (maybe – no one really knows for sure about credit score calculations).
On another note:
Have you really thought about “why” you want a new flat-screen LCD? I catch myself staring at them all the time. They are cool – way cool and I have been thinking that a new LCD WILL be my next major purchase. Then I kind of had a change of heart on it.
I started thinking about “why” I thought I needed one. What was it going to give me that I don’t already have? It would look nicer in my house I guess. The picture quality should be better and I could look into blu-ray then… Other than that – I came up with nothing. I already have cable so the digital conversion is a non-issue and I never had complaints about the picture quality of my current television – I just know there are newer sets out there that are better.
So. Why do I want one? Just b/c it’s cool? I’ve got nothing. Which means I probably really don’t need to waste that much money on it. Summer is coming and I don’t want to be shut up in the house watching t.v. all day anyways. I’ll wait to get one when I *NEED* one.
There are a few reasons I want one…
1.) Picture quality.
2.) Mount on wall (thinking ahead to our smaller home)
3.) Widescreen
We are widescreen buffs and believe that full screen does a major disservice to a film director and it diminishes the viewing experience. Our old 27″ has a pretty small widescreen picture, especially when a movie has a 2.39:1 aspect ratio.
Did I mention they are pretty? LOL
I’ve done plenty of rationalizing, and it will still be just a want and not a need. If our current TV goes kaput and we have cash available, well, that may be the day we get one.
I am human. Part of me hopes once our credit card debt is paid off and have a big enough savings our TV has an unfortunate accident 😛
Used LCD TVs are easy to come by used–you know from some fool who bought it six months ago entirely on credit.
If you do indulge. (I can’t imagine. I hate television… but that’s a separate issue) Be certain you get one as cheaply as possible.
Tricia,
You have given me inspiration beyond words, and for that I want to thank you! Where you are ending…or almost there….(CONGRATS!), I am just beginning. I wish I would have found your blog years ago, but better late than never. I am more determined than ever to become DEBT FREE once and for all. Thank you again! I started my own blog at debtfreejourneythroughchristwhostrengthensme.blogspot.com.
I am very new to this and don’t really know what I am doing yet. I am sure I will learn as I go.
Thank you again!
Debtfreejourney
Tricia,
I am so sorry….I made a mistake…my blog can be reached at:
debtfreethroughchristwhostrengthensme.blogspot.com
DEBTFREEJOURNEY
Tricia,
Off the top of my head, I seem to recall you can decline any unrequested increases in your current credit cards without affecting your credit score. Maybe other readers will come up with more details.
As far as the TV – One suggestion is to start a separate savings fund to purchase a TV by putting in what your payments would be if you bought it on credit. Also, when the time comes to buy, you may decide you want something else instead. Plus it acts as extra emergency funds till you decide to cash it in. And YOU become in control, not a credit company.
Consumers Reports used to have a list of the best times of the year to purchase large ticket items. Those are the times when they go on sale – usually before new models come in or the seasons change. For instance, now is the time for sales on snowblowers. Late summer is the time for rototiller sales, etc. So check when the best time to buy a TV might be. Combine the right time, good sales and your pre-purchase savings fund and you’ll get the most for your purchasing dollar.
Congrats on the limit increase!
Deirdre is correct – closing the accounts will impact your credit score negatively. The better thing to do is simply cut up the cards, so you benefit from the positive effect on your credit score, but don’t fall into any spending traps. You’ll also benefit from the increased credit limit, provided you don’t increase the outstanding balance. You can read more at this link, but the basic idea is that your ratio of debt to available credit is lower:
http://SimpleDebtFreeFinance.com/5-ways-to-improve-your-credit-score
-Joe.
Here in Australia I believe it’s illegal for banks to increase your limits without your permission. They can send you letters saying you’ve been preapproved but that’s about it. Because I’m paying my pesky car loan off faster than I need to I periodically get a letter telling me I can raise my loan amount to $30,000 with just one call.
This is not about the credit increase….but about the flat screen. I do mystery shopping to supplement my income. Those flat screens you are looking at are almost always hooked up a to Blue-ray player. The reason I mention that is because if it is not playing a blue-ray movie or on an HD channel it actually looks quite bad. I want(ed) and lust(ed) for a new flat screen until a friend bought one. He ended up taking it back because he just wasn’t happy with it (for the above reasons and because it would tend to “pixelate” on fast action flix or movement. I am suddenly quite happy with my old tube 30″ widescreen dinosaur which looks pretty good on all channels (and I don’t have HD subscription altho the tv is HD ready) and HD subscription is another monthly expense…..and another thing is the new LCD/plasma sets require a very high quality cable – I’m talking $100 or so…….Just food for thought.
We have two…not that cool. They are even more intrusive than a regular TV…big and inviting to children. Mine are the only ones in the house who know how to work all of the cable/DVR equip, and believe me, they work it. I can get the thing on and off. There was something nice about the simplicity and lackluster of our plain ‘old’ TV. Spend the $ on a nice bookshelf and fill it up with books…
Karen is right about the additional cable costs as far as I can tell. You’ll be sorry if you buy one before you can pay cash anyway…
Stacey is right. My granddaughter is living with me presently and the TV is addictive to her. It’s nearly impossible to get her to turn it off! Those kids can easily learn all the bells and whistles and you end up asking them how to do things. And oh yes, they fill up the DVR too! LOL I’m so sick of Hannah Montana…..
The other explanation is that as part of paying down your debt you’ve increased your earnings to debt ratio meaning that you seem to be less of a risk – and imagine if you put all that money back on your credit card – they’d make a fortune off you.
Um, you do not have $2000 extra at your disposal, unless you saved $2000 and it is sitting in your bank account.
Not sure if this will help you, but you can try what’s worked for me — I almost never crave new technology because I make a choice not to. I make myself consciously realize that the older item I’d been using (a regular TV, an older model car, an older model kitchen item, an old cell phone) was just fine until clever marketing and my immaturity made me think that I needed some newer item. In all areas of life, it’s so easy to become discontent by always wanting more. When I try something nicer once or twice – like a nicer hotel than usual, a higher level of flying class, watching a nicer tv at a friend’s house, etc – I consciously do not create the expectation that I permanently need that higher level item or experience. I also make sure to appreciate what I have and acknowledge that it’s perfectly adequate and that there’s a huge financial savings to not increasing my lifestyle or possessions with the current trends. Flat screen tv’s are overrated. We all have other televisions that are perfectly adequate. We all lived for all of our lives without a specific widescreen technology.
If you do decide to upgrade at some point, please buy used on craigslist, a garage sale or through some other source. There’s never a need to buy new with the latest technology. Some other goober will have been willing to take the depreciation for you.
I’m thinking like Matt. You’ve probably raised your FICO score by paying down your credit debt, thus the automatic increase. I’ve done the same thing in past and that’s when I start getting daily mail with the attached cash-out checks that I’d have to be insane to use.
Incidentally, have you seen anybody blogging about how Experian has severed ties with Fair Isaac (aka myfico.com) and you can no longer get your Experian “FICO” score except directly through Experian? I qualify for a class-action lawsuit regarding this because I bought a myfico monitoring kit prior to February.
Well, I haven’t had to worry about increases myself, but I did have a problem with one being closed down because the program ended and the other two having the rates jacked with one decreasing the limit. It was a hassle sorting that out.
Anyway, if you don’t want the limit increase you can call your card carrier and request they lower it to the original amount without this affecting your score. However, like other suggested, just be careful when you start closing out the card you don’t “want,” as this will impact your score. Try to keep the ones you’ve had the longest so you don’t close out that history, and if you don’t want to use them, just store them in a safe deposit box or a home safe, something like that.