Wed, November 26, 2003
If it's an unsecured credit card, all the money is borrowed. The credit limit is just a number the bank sets based on how much they want to risk losing if the customer defaults. Being $6.00 over isn't much more risk. It means nothing in terms of any real economics. It used to be that banks would just decline charges that were much over the limit. But then someone thought of the over the limit fee. Now the limit is a great excuse to make money. The only defense consumers have is to stay well under the credit limit. Ask for a higher limit if you are charging up near the limit but paying most or all of it off every month. If you are charged up near the limit then not paying it off, put the card away for a while. A higher limit will just be more trouble if you are that sort of spender. The minimum payment is another number the bank sets. It means nothing other than that they want to see you pay *at least* that much in order to prove you're still alive and remembered to pay them. It's the consumer's job to figure how much they must pay to pay all fees, interest, and get the balance back safely under the credit limit. Always pay at least that much no matter how low the minimum payment is.
Tue, November 25, 2003
Please, to all, READ THE FINE PRINT!!! Over limit fees are described in your Cardmember Agreement. Your bank will do the same thing if you go over the limit...its happened to me before, but your bank calls them overdraft fees. Its the same thing! Household is a bank, so when you go over the limit, they have to borrow money from the federal reserve which costs Household money! Its not their fault you charged over the assigned limit, so why should they have to pay for your mistake. Next time they offer to remove 1 fee, take it!