I read somewhere that rather than paying off your credit card balance completely, you should only pay the minimum balance plus 20%. How does that encourage the credit card company in raising your card's spending limit?
2006-09-16 21:45:40 · 6 answers · asked by Anonymous in Business & Finance ➔ Credit
If you pay off your balance each month you are essentially paying with cash. If you pay the minimum and more (to pay for some of the interest), you are showing that you can handle credit and your debt to credit line is in a comfortable range. They can see you are paying your bills but they want to encourage you to spend more. Somebody has to pay for all those pre approved letters that go out ... why not YOU??? If they can get people to use their cards and stay in the credit card trap, they prosper. You don't really need higher spending limits. You need lower interest rates for those unforeseen purchases (needs, not wants) as they arise but other than that, stay away from credit cards.
2006-09-16 21:56:03 · answer #1 · answered by Anonymous · 0⤊ 0⤋
It doesn't. It does help you to pay off the credit card completely. To get a spending limit raised, call the credit card company.
2006-09-17 16:13:36 · answer #2 · answered by Steve R 6 · 1⤊ 0⤋
Usually if you have a good record of paying your monthly statementl they will offer and/or agree to raise the available limit.
I don't know about the balance plus 20% figures.
That may be what some institutions figure is a good record. Check with your company.
2006-09-16 23:04:40 · answer #3 · answered by Yellowstonedogs 7 · 0⤊ 0⤋
I don't know, but I don't agree. All the money experts say to pay off the balance each month if you MUST use a credit card. If you have the money to pay it off, why would you want to incrue the fianance charges each month? That's a waste of money.
2006-09-16 21:54:02 · answer #4 · answered by First Lady 7 · 0⤊ 0⤋
first of all, paying with credit is painless, till the invoice comes. 2nd, the credit card businesses know this and make their money charging loanshark costs of activity. it is the reason congress is investigating those businesses. i could positioned a credit card in my dogs's call, supply him a pretend social protection quantity and get a 3k line of credit. the businesses do no longer seem to do their homework on who they supply the enjoying cards to. they do no longer care because of the fact in case you default, they'll cost bigger costs around the board to pay on your default. it rather is all a activity, and the businesses are those getting wealthy.
2016-12-12 09:50:25 · answer #5 · answered by ? 4 · 0⤊ 0⤋
I agree with Ray. It also helps to push up your credit score, and the higher the numbers, the lower the interest rates.
2006-09-16 22:02:13 · answer #6 · answered by wdy_67 3 · 0⤊ 0⤋