Reasons Not To Have High Credit Card Limit
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Read about these guys last year on TorontoLife: https://torontolife.com/city/crime/name-johnson-chrome-hes-citys-wanted-identity-thief/
It was interesting to learn that while credit card fraud is a crime, most of it never gets prosecuted because the amounts fraudulently charged are too small to pursue/recoup and the investigations would be too cumbersome (time-consuming, manpower needed).
All in all, I like the scheme these guys were running. Very crafty guys.
It was interesting to learn that while credit card fraud is a crime, most of it never gets prosecuted because the amounts fraudulently charged are too small to pursue/recoup and the investigations would be too cumbersome (time-consuming, manpower needed).
All in all, I like the scheme these guys were running. Very crafty guys.
I see no reason to have high limits unless your going to run your cards up and skip the country. Its rear that I spend more than I can pay off every month but these damn companies keep raising my limit its like they want you to be in debt as much as possible
I have about 6 cards.
One has a negative balance so they owe me, one I just put a balance of 65.90 on. One I charged 45.18 the other day on Amazon. And one has the main bulk of spending so far this month - a whooping 310.58.
I have a limit of 25,000 between them.
All have fraud protection clause and since I never run them up, when a big charge is made or multiple charges, I get a text or call.
I have a monthly TransUnion check I do and they are linked to my online banking or apps so when I get or do banking, they are all there except two. Costco and PC. Which I use monthly because I buy gas and groceries on them.
I also cap those limit rises or decline when they send me the notice. I think I'm good.
Credit Cards can be amazing things when used right.
One has a negative balance so they owe me, one I just put a balance of 65.90 on. One I charged 45.18 the other day on Amazon. And one has the main bulk of spending so far this month - a whooping 310.58.
I have a limit of 25,000 between them.
All have fraud protection clause and since I never run them up, when a big charge is made or multiple charges, I get a text or call.
I have a monthly TransUnion check I do and they are linked to my online banking or apps so when I get or do banking, they are all there except two. Costco and PC. Which I use monthly because I buy gas and groceries on them.
I also cap those limit rises or decline when they send me the notice. I think I'm good.
Credit Cards can be amazing things when used right.
Never ever run with one card alone! You could be at the cash trying to pay for groceries, gas or whatever and find out your card is being declined because it got "compromised." At that point you could jump up and down as much as you want with the credit card issuer on the phone and it won't do shit.
You need that second card as back up even if you don't use it on a regular basis - just speaking from personal experience.
You need that second card as back up even if you don't use it on a regular basis - just speaking from personal experience.
That happens during the holidays all the time. December sucks for that because I always get a card or two declined every year.
Learned my lesson years ago
Now i have 2 cards
MC..VISA...both have 5k limits and "0" balance
I also have a 300K secured LOC Im using for the home renos im doing right now
All other purchases are cash...upto 10k
Now i have 2 cards
MC..VISA...both have 5k limits and "0" balance
I also have a 300K secured LOC Im using for the home renos im doing right now
All other purchases are cash...upto 10k
I remember reading about these guys last year. They acquired a lot of fraudulently obtained credit cards which there is nothing you can do about as you wouldn't know about the fraudulent credit cards until the creditors find you and start to call you for payments. These frauds target people with great to excellent credit. I've had a family member who was targeted for about $24K and she didn't know until a few months in when they racked up the cards and the creditors started calling her for payments, only to find out it was fraud, which is a pain to go through and claim with the creditors.
As for not having high limit credit cards unfortunately some people/business owners need high limit credit cards for work as they need to make purchases online or for entertaining guests. It would be a real hassle to take $10k cash for a night of entertaining overseas clients.
Yeah, I need a high limit since I’m travelling a lot and it’s not uncommon to have to book a package that costs over 10k. I have had fraudulent charges made on my cards twice, but I make sure to monitor my accounts, so I just called Visa and told them the charges were fraudulent. Took about ten minutes to resolve, they cancelled my card and sent me a new one, and I wasn’t liable. Really wasn’t a big deal.
As for going into debt, it’s not really a problem unless you’re buying things you can’t afford and not paying your bills on time. It’s not that hard if you’re responsible.
As for going into debt, it’s not really a problem unless you’re buying things you can’t afford and not paying your bills on time. It’s not that hard if you’re responsible.
The definition of a high limit really varies based on your income and economic position.
Is $10,000 a high limit? Perhaps for many of us, $10,000 is more than we spend on our credit cards all year? However, at one time in my life, I traveled internationally extensively for work and I found that, between airfares, hotels, food and other travel, I was paying over $10,000 each month on each of two credit cards I was using.
While it's best to protect your information and keep a close watch to ensure you don't have fraudulent charges on your cards, it's also important to remember that with the major card companies (MC, VISA, AMEX) you are not responsible for unauthorized transactions committed against your card number unless the card was present and your PIN was used. So long as you do not disclose your PIN, you are eligible to be reimbursed for any internet fraud or magnetic swipe transactions that are performed by fraudsters trying to compromise your card.
So, in the case of the news story in the OP, the real victims of the fraud are the big banks, This is one reason why Credit Card interest rates are so high...the banks need to cover their losses.
Is $10,000 a high limit? Perhaps for many of us, $10,000 is more than we spend on our credit cards all year? However, at one time in my life, I traveled internationally extensively for work and I found that, between airfares, hotels, food and other travel, I was paying over $10,000 each month on each of two credit cards I was using.
While it's best to protect your information and keep a close watch to ensure you don't have fraudulent charges on your cards, it's also important to remember that with the major card companies (MC, VISA, AMEX) you are not responsible for unauthorized transactions committed against your card number unless the card was present and your PIN was used. So long as you do not disclose your PIN, you are eligible to be reimbursed for any internet fraud or magnetic swipe transactions that are performed by fraudsters trying to compromise your card.
So, in the case of the news story in the OP, the real victims of the fraud are the big banks, This is one reason why Credit Card interest rates are so high...the banks need to cover their losses.
The IMPORTANT thing to do with credit cards is to pay them off each month.
I also try to remember to read the pleasant little warning on the statement that tells you that if you only pay the minimum payment, how long it will take to pay off the balance. A recent statement for a card where I had only charged ~15% of the limit, reminded me that it would take 40 years and 5 months to pay off the balance at the monthly rate of the minimum payment. It always sounds like an unbelievable fictional time period, but it is true.
I use 4 cards, each one for different types of purchases. It is the lazy way to budget and keep track of what you are spending money on.
I also review each transaction on my cards - even small ones. One card was recently compromised for a $10.00 donation for what looked like Amnesty International, but was just a scam.
But I pay every card off each month. Not doing so is basically financial suicide.
PS - You should also understand that having credit cards that you do not actually use, will each reduce your Credit Score of your credit rating. No activity on a card reduces your credit score by something like ~20 - 30 points for each card.
I also try to remember to read the pleasant little warning on the statement that tells you that if you only pay the minimum payment, how long it will take to pay off the balance. A recent statement for a card where I had only charged ~15% of the limit, reminded me that it would take 40 years and 5 months to pay off the balance at the monthly rate of the minimum payment. It always sounds like an unbelievable fictional time period, but it is true.
I use 4 cards, each one for different types of purchases. It is the lazy way to budget and keep track of what you are spending money on.
I also review each transaction on my cards - even small ones. One card was recently compromised for a $10.00 donation for what looked like Amnesty International, but was just a scam.
But I pay every card off each month. Not doing so is basically financial suicide.
PS - You should also understand that having credit cards that you do not actually use, will each reduce your Credit Score of your credit rating. No activity on a card reduces your credit score by something like ~20 - 30 points for each card.
Exactly, credit cards are meant for convenience (and now racking up points/cash back/free extended warranty) and not a means to borrow money - if you want to borrow short term money then get an unsecured line of credit. Mine is at P+1% (legacy rate).
My routine is whenever I use my card for anything, I make sure to check my banking app every day and pay it off as soon as the charge appears on my account. I don’t buy things I can’t afford, so I’ve never had an issue doing this. I don’t think I’ve ever had to pay interest on a purchase. Credit card companies hate me for using this one weird trick!
Have 5 cards with about $35k of combined credit. Never pay any interest since pay off or have a few with small balances with free interest for 15 months or so.
I use one where I get 2% cash back credit most of the time and another that does 2% on groceries and a few other things. No annual fee. I also got 40,000 frequent flier miles on one for charging $2500 on which I paid off. That 40,000 miles added to my other FF miles booked me a roundtrip to Germany for next June to try FKK clubs etc. It took 60k and I had about 71k but could never had reached it without the 40K from opening a credit card.
One of the most important factor for credit scores (FICO etc) is the amount of unused credit. However, I charge small amounts on cards I don't use much just to keep them active for the unused credit. If you go inactive for maybe six months or a year, they may cancel the card and you lose unused credit.
If you travel out of the country you need to let credit card company know. Twice I tried to check in to a Canadian hotel and card was rejected since was Canada and had to call before I could check in. Now I notify any card I may use of my travel dates - they all seem to have the ability to note that on account.... reminder I need to do for my Germany trip!
I use one where I get 2% cash back credit most of the time and another that does 2% on groceries and a few other things. No annual fee. I also got 40,000 frequent flier miles on one for charging $2500 on which I paid off. That 40,000 miles added to my other FF miles booked me a roundtrip to Germany for next June to try FKK clubs etc. It took 60k and I had about 71k but could never had reached it without the 40K from opening a credit card.
One of the most important factor for credit scores (FICO etc) is the amount of unused credit. However, I charge small amounts on cards I don't use much just to keep them active for the unused credit. If you go inactive for maybe six months or a year, they may cancel the card and you lose unused credit.
If you travel out of the country you need to let credit card company know. Twice I tried to check in to a Canadian hotel and card was rejected since was Canada and had to call before I could check in. Now I notify any card I may use of my travel dates - they all seem to have the ability to note that on account.... reminder I need to do for my Germany trip!
Yes the little tricks. I remember when cashback was introduced and at that time you could use a credit card for it. That was basically a free cash advance. But then I guess the credit card companies got smart and put a stop to it - and you can only use a debit card for cashback now. Oh well.
Yep, I'm pretty much in the same boat. My limit is $30,000 between the three cards I have. One has $7,500 that I use on daily purchases (and pay off monthly) because of the rewards. The other two are rarely ever used. One of them is a low interest card that I'd use if I actually did have to carry a balance and the other is for emergencies...though I could probably just get rid of that one at this point.
And yet, I get constant offers to increase those limits. Several times a month. They send offers by email, text, regular mail and when I log in online. Getting kind of old by now. How many times do you have to decline before they give up?
You need to call into the company and request no more increases. They will or should put it on your account but it us some weird special request thing you have to do.
As for them getting cards in your name, you need to keep up with your credit report. That is what I check basically monthly. There is always an update when a new card is applied for. At least for me.
I don't want to say it would never happen to me, but I think it would be more difficult and I would catch it pretty fast.
I use 1 card specifically for online shopping and it has a relatively low limit. So I'm not as concerned if it gets hacked. That being said, it's still a good practice to: keep receipts / confirmation emails so you can reconcile transactions and watch your account for unrecognized activity. You have to be vigilant especially when online shopping because many businesses payment processors like PayPal, Square, etc. So those transactions can show up as 123456 Ontario Inc. etc and you'll have no idea what they are.
I think someone already mentioned this, but one thing to watch out for is your credit utilization ratio. That's the ratio between how much you spend each month (balance) and your limit. For example, if you have a $1000 limit and you regularly spend $700 every month you'll have a utilization ratio of 70%, which might affect your score negatively. If you spend $300 a month regularly on a $1000 limit you'll have a ratio of 30%, which is generally good.
A couple of things that are probably best not to do are:
1) closing unused credit card accounts assuming there are no annual fees
2) request a credit limit decrease
Both of these can raise your utilization ratio because you have less credit available.
Credit issuers commonly raise limits automatically if you have been using credit responsibly and that can reduce your ratio assuming your spending habits don't change.
I think someone already mentioned this, but one thing to watch out for is your credit utilization ratio. That's the ratio between how much you spend each month (balance) and your limit. For example, if you have a $1000 limit and you regularly spend $700 every month you'll have a utilization ratio of 70%, which might affect your score negatively. If you spend $300 a month regularly on a $1000 limit you'll have a ratio of 30%, which is generally good.
A couple of things that are probably best not to do are:
1) closing unused credit card accounts assuming there are no annual fees
2) request a credit limit decrease
Both of these can raise your utilization ratio because you have less credit available.
Credit issuers commonly raise limits automatically if you have been using credit responsibly and that can reduce your ratio assuming your spending habits don't change.
Messes with your credit score... better to have higher credit limit and multiple cards using only %5-%10 percent of the limit per card for maximum cotribution.
