I have a $1,500 bill with a $2,000 limit if I pay off all of my bill does that mean I will still have a limit of $2,000 or whatever was left before I paid off the balance? It the same with my other credit bill but I owe only $500 with a $ 750 limit ? I not sure how it all works?
Confused!!!
2007-12-22 03:31:21 · 4 answers · asked by Rhonda L 2 in Business & Finance ➔ Credit
The limit on a credit card is the maximum you can charge. When you pay off your credit card, the limit does not change. Your credit card bill normally reports the credit limit and the amount of the credit limit still unused.
I hope you are paying off your credit purchases in full every month. Leaving a balance on your credit card is the worst type of debt you can have, with very high interest rates. On the other hand, paying off the card means no interest and you are establishing a good credit record. Make sure the payments are not late.
With regular payments in full and on time, you can ask the card company to increase your credit limit. that does not mean you should charge more on your card. Your credit score is based, in part, on what percentage of your credit limit you use. People who max out their cards have a lower score than people who use only 20-25 percent of their credit limit. You should try to limit your charges to no more than $500 on the card with the $2,000 limit and no more than about $150-200 on the other card. That will establish you as an excellent credit risk.
2007-12-22 03:44:49 · answer #1 · answered by Anonymous · 1⤊ 1⤋
The former, but not instantly. You need to keep the balance below the limit. After you pay off the bill (in full or in part), you balance goes down, so you can charge more. However, there is a bit of a time delay. You cannot mail the payment and immediately charge stuff before they have even received the payment!
2007-12-22 15:05:03 · answer #2 · answered by StephenWeinstein 7 · 0⤊ 0⤋
You subtract the balance from the limit to determine how much is available for new purchases. The more you pay down the balance, the more you have available to spend, up to the limit. The limit only changes when the issuer increases it.
2007-12-22 11:43:10 · answer #3 · answered by Harbinger 6 · 0⤊ 0⤋
Serge posted an excellent answer
2007-12-22 16:21:25 · answer #4 · answered by echo 7 · 1⤊ 0⤋