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Can you ever celebrate Easter frugally?

Some frugal ideas to celebrate the Easter

Meg Favreau, senior editor at Wise Bread, said, “Whether you’re inviting family, friends or neighbors, you’ll get to share the work and cost of cooking while celebrating the holiday with others,” Yes! there’s no such rules, that you should pay a lot to feed your invited guests or to fill your kid’s Easter basket. Apart from these, getting dressed up specially for Easter is a common tradition but you can buy these type of special dresses at consignment shops, thrift stores and even yard sales. You can save a wad of cash on these gently used items.There’s no point to buy those special occasion dresses from an expensive store. So, whatever the plan you’ve made there are always some frugal options which can save your hard earned money while celebrating Easter.

Here are some frugal ideas you can always consider to celebrate this Easter to a new level.

1. Know your priorities

At first you need to be determined in order to be frugal on this Easter. Decide your own way of celebration this Easter in advance. Thus, you can reduce extra costs on other things. Remember, sticking to a plan is very important. For instance, if you’re spending money on potluck to have relaxing time and good foods with friends and family, then you should reduce costs on Easter clothes for everyone. On the other hand, if you’re planning to celebrate the event spiritually with your kids, then you should focus on each and every part of it not on expensive parties. Thus, you can maintain your budget and enjoy the event as well.

2. Plan the menu beforehand

As I’ve already said, planning in advance is the best way to stick to a budget. Plan the Easter menu in advance this year and see it’s effect! Also a pre-planning helps to shop more economically. You can easily reduce extra cost on store items and feed your family and friends their favorite dishes as well. Plan a smart and small menu so that you can get free time to enjoy with the guests.

3. Pick some frugal ideas

Here are some of my favorite frugal tricks:

  • You can make the cooking a family event. Organize a potluck and invite friends. Share all the expenses and duties with each other. Thus, all of you can enjoy the event and savor dishes that everyone brings.
  • You can also organize a barbecue or a picnic with burgers and special Easter salads at your front yard.
  • Another most traditional way to celebrate Easter is egg dying. Don’t waste money on egg dying kits. If you already have some food color in your kitchen then use them to dye eggs with kids. Ask all the kids invited at your home to search the hidden eggs and enjoy the Easter in a traditional way.

4. Reuse items to save money

Take an inventory look in to your store room before buying disposable plates, Easter baskets, plastic fillable eggs, shredded papers and other decoration materials. I’m sure you have already some items at your home. So, try to reuse them and present in a new way with a different look. Make sure all the items, already purchased that can be reuse in next year. You can get reused items at thrift store on cheap.

5. Try some DIY ideas

Try some DIY ideas which includes recipes, decorations, crafts, gifts, treats to celebrate the frugal Easter. Search on Internet to get some easy and quick ideas. For instance, you can make your own bunny shaped treat, Easter pie. Try to use colored marshmallow to add color in your bunny. Make kites at home and fly them with your kids.

6. Save on Easter supplies

Buy Easter supplies (candies, trinkets) from dollar store. Fill the basket with some inexpensive items such as crayons, color book, fruit snacks, graham cracker, bubbles and bubble blowers, sidewalk chalk, jump ropes, balls. Decorate the basket of your own with shrink wrap and tie up with a colorful bow to give festive look. Make sure to reuse the items in next year.

Final words

Eat the eggs after the decoration and Easter fun is over. Try to make devilled egg, egg salad sand witches or eat them up at your office lunch. You can get many other leftover recipes on Internet. Remember, by being some creative you can always keep your holidays inexpensive yet full of fun.

By carol on March 31st, 2015

4 Things you should consider before choosing a new credit card

things to consider brfore choosing credit cards

You must be one of them who are crazy devotee with the idea of using credit cards instead of money while buying anything! There are many people who can’t even think about their life without their plastics. But, don’t forget that, these plastics can easily leave a long list of credit card bills if you use carelessly.

Remember, having credit card debts can lower your score. Fixing credit score is not that easy. So, you need to organize your finances in best possible way first. Moreover, in case you incur credit card debts you need to pay off the outstanding bills which is very hazardous. There are many professional organization available to provide you debt solutions. Remember, they charge a big amount to solve your financial issues.

4 Things a new borrower must consider

If you can be careful before choosing your new credit card, you can avoid such problems as well. Here are some useful guidelines that you should know before opting a card.

1. Be sure about the credit limit

Try to evaluate the exact credit limit that may be sufficient for you. You’re the one who knows better how impulsive shopper you’re. Your credit limit will depend on your personal credit history. It can be any digit ranging from hundred dollars. Try not to create the situation when you’re close to your credit limit as you may pay higher fees when you over-exceed. Asses your credit limit beforehand to become a creditworthy borrower.

2. Be sure about the interest rate of your credit card

While you take out a credit card, you should check the interest rate that appears as the APR or the annual percentage rate. This can either be a variable rate card or a fixed rate card. If you take a fixed rate card, you can be sure about the monthly debt payments but with a variable rate card, the rates may fluctuate with time.

3. Analyse your spending obsession

If you’re a regular shopper and impulsive shopper, you should think twice before getting your credit card. If you love to shop and quite wealthy, then you need to pay attention to the credit limit, and the fees that they may charge you if you cross the credit limit. If you’re the one who pays their balance in full every month, then you need to work on the interest rates. You need to negotiate with the issuer in order to get lower interest rates.

4. Stay away from the late fees and penalties

The credit card issuer have many tricks to suck money from you. One of the most common charges are cash advances, transactions and over the limit charges for exceeding the credit limit. You need to negotiate or bargain with the lender in order to get a credit card with reasonable charges. The late fee penalties should also be taken into consideration by the credit card borrower.

Conclusion

Lastly if you’ve decided to shop a new credit card, then you should take into account the above mentioned factors so that you don’t incur high interest debt in future. You need to investigate the reputation of the credit card companies so that you don’t become a victim of scams as well.

By carol on March 26th, 2015

6 Credit card tricks a beginner shouldn’t avoid

credir card tricks a beginner shouldn't avoid

It’s advisable to understand the proper usage before handling a particular tool. This is applicable with your plastics as well. Specially for beginners who are new on this field. Remember, if you use your cards responsibly, then you’ll be able to meet your every need without accumulating debts. Remember, credit cards can be the big sources of financial problems as well. Because, most of the times, there is a common tendency to use credit cards in a wrong way. And the result is huge burden of credit card debts. So, It is very important to know how to use the credit cards wisely so that you don’t fall into any financial trouble in coming days.

6 Credit card tricks for beginners

Here goes some useful tricks that helps beginners to use their plastics safely and in an effective way.

1. Take wise decisions regarding purchases

You need to take wise decisions when it comes to making any purchases. Ask yourself that you just want something or it’s actually your need. Don’t splurge on items that you don’t need.

2. Buy what you can afford only

Don’t treat your credit cards as free money. Remember, credit cards allow you to purchase anything. But, you need to pay off the bills on time. Try not to buy things which are beyond your affordability. So, it will be very difficult or almost impossible for you to pay it back. And you may accumulate huge credit card debts.

3. Negotiate for a lower interest rate

Make sure you’re getting the best deal with your plastics. You need to assess the interest rate on your cards on a regular basis for this. Negotiate with the creditors in order to get the best possible deals.

4. Use cash to purchase items of daily use

Try to use cash instead of credit cards while buying daily household items such as: foods, clothes, household things, school supplies etc. This is because you’ll be consuming these goods already before the time comes to pay it off and it becomes very difficult to keep yourself motivated towards the payment for things that you have already consumed.

5. Use more cash and less credit

Try to use cash as much as you can. If you’ve the money to buy something, then you must use the cash instead of using credit. This is to be done as if you do not feel like paying for something now, then there are high chances that you’ll not want to pay for it in future. Thus, you should pay as much as you can in cash.

6. Read the agreement carefully

Remember, understanding credit card’s terms and conditions is important. Almost each credit card company has different terms and conditions. Some credit card companies charge annual fees, while other has different policies. So, you need to read all the guidelines and terms thoroughly to take the right and favorable decision. Try to get the all the answers of your queries from your issuer.

Conclusion

You need to protect your credit cards to reduce the chances of credit card fraud as well. Keep all the receipts in a safe place. Check the statement on a regular basis (once a month). Ask the card issuer if you find any errors or any transaction that you don’t recall . Incase, you lost your card, you should report a lost report in your local police station and inform the company to block your card.

By carol on March 19th, 2015

How you can spend the year 2015 with good credit

How you can spend the year 2015 with good credit

If you have been struggling with debt for a long time, then it’s high time to take some steps to rebuild your score. You might think that a poor credit score may just keep you away from getting new lines of credit. But, bad credit may leave you in a worse financial condition as well. It may leave you homeless and it may also leave you jobless. Because, almost every company will check your credit score to get an idea about your financial condition. So, it is very important for you to take some steps on your own to repair your credit.

4 reasons why you should repair your bad credit

Don’t accept your bad credit score as just another financial condition. If you don’t think about fixing your credit report, you’re committing next biggest financial blunder. Below are some reasons why you should rebuild your bad credit.

1. To stop paying extra bucks on security deposits

Utility service provider will check your credit score before providing you the service. Incase you’ve low credit score they will charge you a deposit. So, once you improve your credit score, it will help you stay away from all those high security deposits.

2. To save more dollars on interest rates

Remember, lending industry has entirely become a credit-based . So, it is important for you to repair your credit to get loans with favorable terms and conditions. Low credit scores means high interest rates. And it will also influence the outstanding balances of your credit cards. If you fix your credit score before applying for a new credit, you’ll be able to get the best interest rates.

3. To lower your insurance premiums

You need to recheck your credit score, if you’re paying too much on your insurance premiums. A poor credit score highlights that you’re irregular on your monthly installments. Thus, implies you’ll be a risky borrower. This will surely increase your insurance premiums.

4. To stop paying cash for anything you want

If your credit score is below the benchmark, then it will be difficult for you to get credit cards. And without credit card you need to pay cash for everything you want to buy. Which is quite difficult for you.
Moreover, obtaining a higher credit limit, buying a new house with mortgage financing at an affordable rate are some other reasons for repairing bad credit. Therefore, if you’re still not serious about credit repair, consider the benefits that you may get in the lending industry and plunge into taking this step.

4 Ways to boost your credit and maintain throughout the year

It is better to repair your credit on your own and become creditworthy to give value to your hard earned money. Check out theses ways to give a decent boost to your credit score and maintain the same throughout the year.

1. Pay off your due bills

About 35 percent of credit score comes from your bill payment record. As per the experts, If you’re 90 days late, then your credit score will drop more than the person who is only 60 or 30 days late on his payments. So, the more you delay, the lower your score. So, try to pay off your due bills as soon as possible.

2. Review your credit report on regular basis

You’re supposed to get a free copy of your credit report from the three credit reporting agencies. Order a copy and review it carefully to mark the errors and the negative listings. Thus, you’ll come to know where you stand financially and how you’re going to plan to dispute the mistakes.

3. Dispute the errors and fix them

It’s quite possible to get minor errors and therefore you need to take care of all these mistakes to get removed from your credit report. File a dispute with any of the three credit reporting agency and dispute the dates, amounts, interest rates and all other negative listings in the report.

4. Try paying off your debts

Having credit card debt is the major thing which can affect your credit score. If you’re not able to pay off your credit card debts on your own, then try to seek professional help. You can get easy affordable monthly payments which will gradually boost your credit score.

Conclusion

Try not to be intrigued by the promising ads of the credit repair companies to get higher credit score. Booting your own credit score is tough but possible. So, have patience and be financially wise. Start following these above mentioned tips and practice healthy financial life. You’ll be able to boost your credit score and many other things (credit card, low interest) in coming days.

By carol on March 12th, 2015

Credit cards: Do you need a wallet full of credit cards?

Is it good to have multiple credit cards? This is probably the biggest question people ask. You may find numerous myths but the fact is there is no such ‘perfect’ number for credit cards. What actually matters is how you deal with credit cards. If you want to maintain a good credit score, then you need to pay all the bills on time. You need to evaluate your financial approach in order to know if you’re  handling too many credit cards. Here goes some financial stage which will help you to get the answer of your question more clearly.

Check if your debt to income ratio is too high

Mortgage lenders will surely calculate your debt to income and may deny your loan application if the ratio is too high. Check your debt to income ratio in  order to test whether or not you’re spending too much for your multiple credit cards. If you find your DTI ratio is above 37%, then you should close some of your  unused credit card accounts.

Higher credit utilization means lower credit score

More credit card means more credit card balance. And it will increase your credit utilization too. Remember, you credit utilization should always be less than 30% in order to get a better credit score. Once your credit card balances rise, your credit utilization will rise equally. So, keeping less number of credit cards will maintain credit utilization.

Managing too many cards are a troublesome work

You will find difficulties to manage your multiple payments. You should be very confident if you can successfully keep track of all your credit cards. Credit card company may close your accounts due to lack of use or inactivity. Once your accounts get closed by the credit card companies, your credit score will be highly affected as it will decrease the total amount of credit score. So, you need to use them on a regular basis. Moreover, you need to take care of payment due dates, interest rates and fees. Managing less card is much hassle free work even in this advanced technical life as its very hard to keep track of multiple accounts.

Some basic facts you must know

As per experts, one credit card is fine for a starter who wants to build credit. People need to gather experience in order to manage multiple credit cards as it requires responsibility and knowledge. Once you have experience with on single credit card and you’re quite confident about your ability to take care of other credit cards, then you can go for another. When you find yourself exhausted to manage your series of credit cards, then it means you’re too weak to control so many cards.

Lastly,  having few (2-3) credit cards is good if you can handle them. It becomes easier to meet different types of need. As example try to keep one reward credit card for common purpose to earn points. And another one for emergency need or backup (medical bills, stolen, lost). But, remember applying for too many credit cards at a time is not advisable.

By carol on December 10th, 2014

Credit repair – 5 Misconceptions that lead you to wrong direction

Your credit report is extremely important in generating your credit score. In spite of the importance of credit report, many people are unaware of how credit reports can be damaged or repaired. Myths and misconceptions about credit repair are quite prevalent. You should be aware of credit repair facts so that you don’t face trouble later on regarding your credit reports and scores.

Here are 5 common misconceptions about credit repair:

1. Credit can be repaired in no time

The companies which offer you provisions for repairing your credit instantly are mostly scam companies and can lead you to trouble. These companies usually obtain a new tax identification number for you, that is legally reserved only for businesses. But if you use this number instead of yours, you may fall into legal trouble and be charged for fraud. Moreover, your personal information can be stolen for identity theft.

2. You are unable to fix bad credit

Despite of all the advertisements about credit repair process and credit repair agencies, there are some who believe that bad credit can’t be truly repaired. This is an absolute misconception. All negative items can be dealt with though it may take a long time and regular repayment of due bills. In addition, you should pay off all your older debts and stay current on the new bills for your credit score to improve with time.

3. You cannot check your own credit report

Contrary to what many people believe, you can actually check your own credit report and that too free of cost from the three major credit bureaus Experian, Equifax and Transunion. If you do it through a proper government agency, many places allow you to check your credit once or more annually.

4. Credit repair agencies have Government authority

It is a prevalent idea that credit repair agencies are empowered with governmental authority. In reality such empowerment does not exist. Credit repair agencies and credit bureaus are like any other private business that deal with buying and selling of products to generate profit. No special authority is bestowed on them.

5. Enquiries have negative impact on credit report

Inquiring about your credit score is generally known as soft enquiry. This does not affect your credit score negatively. However, if multiple creditors pull out your credit reports in order to approve your loan request, it will affect your credit score negatively.

You should know that you can repair your credit report by two ways. The first way is by disputing the inaccurate negative items on your credit report and the second way is by adding more positive information to your credit report in order to offset the negative ones.

By carol on September 18th, 2014

How can you prove credit reporting agencies that you are alive?

Usually, consumers check their credit reports to ensure that credit reporting agencies are reporting tradelines and payment records correctly. But what can a consumer do when credit reporting agencies believe that he is dead and buried?

Denise, a regular reader of a popular financial blog is finding it hard to convince credit bureaus that she is very much alive. Everything was fine on her credit report until she closed one of her credit card accounts few months back. The customer care representative marked her ‘deceased’ instead of “customer closed account” by mistake. After she solved the matter with the credit card company, she sent a letter and her birth certificate to the credit bureau. Denise has clearly explained in the letter about the mistake made by the credit card company and the fact that she is alive. Three months have passed since then but she is still marked as deceased.

When the credit bureau was approached, the representatives said that they were trying to contact Danise. On the other hand, the public relation manager raised an important question – How did Danise come to know about the mistake? From the credit card company or from the credit report itself?

If Danise found the error from the credit card company, then there is only one solution. She should obtain an updated copy of her credit report as soon as possible. She would get the instructions on how to file a dispute with credit bureaus from there.

Have patience for at least 30 days

Danise need to wait for at least 30 days after sending the dispute letter. Usually, the dispute process is completed within 30 days. Sometimes, the process is completed even more quickly. The credit bureaus can’t change the facts on Danise’s credit report without having any idea about what she actually did. The credit bureaus need to investigate and come to a conclusion.

Once the 30 day period is over, Danise has to follow up with the credit bureau. For instance, she can send all the documents (that help to prove she is not dead) via certified mail with return receipt request. It is also important to keep all records of correspondence. For instance, she must note down the name of the representative with whom she had a conversation.

There is yet another solution too, and that is she can ask the credit card company representative to submit corrected information. Here too, she needs to retain all the records properly. Other than that, Danise should not forget to use certified mail.

If all her attempts to update her credit report with correct information fails, then the last weapon would be to register a complaint with the Consumer Financial Protection Bureau. She can also get in touch with an attorney for proper advice and help.

By carol on September 11th, 2014

4 Popular credit card tricks that make you look dumb

Before buying a credit card you must be very particular about certain things. All credit card companies are there to make profit. Your personal well being is not their primary concern. Hence, they use all kinds of tricks to cheat you so that they can maximize their profit.

Some of the tricks you should keep yourself aware of are as follows.

Trick 1 – Going for uninformed change of address

Many a times, the credit card company changes its address and doesn’t bother to inform you about it. In this case, you’ll send the payment to the previous address and by the time it will reach them, it would be considered a late payment. You will have to end up paying late fees for no fault of yours. To avoid such a situation, you may find out the address in advance, by checking the mailing address of the company in your monthly statement. You may even call the company to verify the address.

Trick 2 -Tempting you to take cash advance

It is advisable to consider thoughtfully whether you need to take out cash or not. This is because the interest rate for cash advances is very high. The amount you will have to pay will also include cash advance fee and there will be no grace period in which you can pay off the interest.

Trick 3 – Charging late fees

One of the most important sources of income of a credit card company is late fees. Some companies often charge you late fees if you are late by a few minutes. You must understand that payments are due on a certain time, not a certain date. So do not consider the date to be the due date. You must make sure you know the time on that particular day, before which you must make the payment. This is because if you are past the time, then you will be subject to late fees and also an increase in interest rate. Thus, you must be very careful to make your payments before that particular time so that the credit card company can not charge you unnecessarily.

Trick 4 – Charging balance transfer fee

You may consider balance transfer if you have a very high interest credit card and are having difficulty in paying it off. Under the balance transfer method, you can transfer balance from a high interest credit card to a low interest credit card. However, you must check before you do this to find out if your credit card company charges a fee for balance transfer. If so, you must be aware of how much is the charge. Balance transfer fee is now about 3% to 4%. If you’re asked to pay more, then you should not pay.

Lastly, think twice before swapping credit card for a big purchase. They are useful when you properly use for a right purpose and also maintain a good credit report.

By carol on September 4th, 2014

Optimize your dollar: The ABC of pro-budgeting

Millions in the country have celebrated the National Dollar Day. People have found one of the most novel ways to celebrate this day by making some smart financial decisions so as to derive the utmost return on investment (ROI) out of every dollar spent. In other words, they have made plans to reduce their living costs, boost their savings and stay debt free throughout.

So, are you eager to follow a fresh budget and save more money mid-way through the year? If yes, then read along.

What will land you in the league of super-savers?

First of all, you can skip gulping down those costly champagnes. Instead, you can enjoy moments like these by setting some practical and tangible financial goals for yourself. This could be anything related to budgeting, saving money or just simple frugal living. So, let this occasion of the National Dollar Day be your fresh source of motivation to get the most out of your each and every dollar.

Remember, these dollars are yours and you’ve earned them. Hence, make sure the ROI is the most that you can actually get.

When and how a budget calculator is helpful?

You could be planning a big-fat wedding, or buying your stationeries for college or you’re floating a business venture of your own. In that case, it is nothing but obvious to keep a good record of all your investments or transactions, otherwise it’ll become next-to-impossible to find out as to where your money is actually going.

Therefore, you can resolve your dilemma by using a free, online budgeting calculator. This is because it’ll not only streamline the process of money management for you, but it’ll also provide you with a window to look at the bigger picture and decide accordingly, as to where you’ve spent your dollars all this while.

What would you buy for the wedding?

You are deft in your planning to set up a perfect American wedding by having all that it would require – a classic dress, personalised invitations, flowers and of course the wedding cake.

However, before proceeding any further, are you really aware of your affordability to realize each and every detail of your wedding plan? During such scenarios, budgeting tools would come in handy for you by keeping a perfect track record of all your expenses so that you know where to draw the line in order to prevent breaking your bank.

As far as getting an estimate of the overall wedding expenses is concerned, then you can always take refuge with the specialized budgeting calculators namely, wedding budget calculator. Here, in these type of widgets, you can simply start off by putting in the figures for the wedding items you’ve planned to buy. Add to that, different other known figures like the total number of guests you’re expecting on the D-Day and the number of people you want to invite for your wedding party.

When you are done with entering with the above discussed numbers, then an efficiently built wedding budget planner can give you a clearer picture of the actual costs by breaking them down into suitable categories. Thus, it would permit you to track the exact amount you are likely to spend for the grand event.

What about your start-up venture?

As per MSN Money, a leading financial website on the Internet, when planning to float a business venture, an entrepreneur like you should work on two of the most important categories – the initial start-up expenses and the recurring cost of operating the same.

To make it easier for you to understand, here’s an example:
Initially, you’ve made a one time deposit for all sorts of public utilities and then you receive just one monthly electric bill after that. As a result, you get your total utility expenses in the both the categories. Taking advantage of a start-up business calculator will enable you to get an estimate of your overall startup costs and also help you to decide the amount of cash reserve you’d require before opening the doors to your clients, i.e., business.

Does it help to budget for back-to-school shopping?

Yes, its true that a lot of states are offering its parents with tax breaks for all the expenditures incurred by them to fulfill the need of their back-to-school children. This is to provide them with some financial relief and help them save some precious dollars. But, the expenses for every individual child of a family could increase anyway. Add to that the money needed to buy additional equipments like sport kits or any sort of computer-related supplies.

So, if you’re identifying yourself with the above scenario, then you can make good use of the back-to-school budget calculators that are available at scores of financial websites. Budgeting calculators such as these will not only allow you to find out the amount needed to pay for your child’s education but also, educate you and your child about the importance of budgeting and may even boost your money management knowledge.

What does the money experts ultimately say?

Lets talk about what our financial guru, Suze Orman has to say about saving money and budgeting. According to her, you should slash your family (read: fun) spending by at least 10 percent every month. So, if you’ve been spending around $100 on your lattes, movies and gaming every month, then cutting down that amount to $90 won’t make hell of a difference in your life or for that matter in your family member’s life. The difference here, this time would be that not only you or your family members are happy, but your wallet is too.

Debt expert, Dave Ramsey has a different take on matters related to money and debt. You know why? Because he knows why you always end up breaking your bank, even though you’ve tried your level best to budget and save money. The answer is, you forget to count in your food dollars when planning your monthly household budget. And even if you do, then like most others, you too severely under budget your monthly grocery bills.

Therefore, even if you’re contributing $100 toward your savings account, the fact is almost $80 of the same gets spent on trivial items. Therefore, he suggests people like you to add up all the grocery costs at the end of a month, including your Starbuck coffees or that occasional Burger King treat. Add to the final figure $50 approx.

The grocery budget that you’ll get now will be your real one. So, if you spend below the stipulated budget, then it’d be great, or else, there’s always room left for improvement.

By carol on August 28th, 2014

When should you monitor your credit limits to manage financial liability?

Your FICO score can have a great impact on various aspects of your life. Everything from having a chance of leading a decent retired life to the ability of grabbing the best job in the market is determined by your FICO credit score.
Few years back, there was not much information amongst people about this magical number but now there is loads of information as well as misinformation everywhere. If you’re in the market for taking out a loan, make sure you initially go for credit repair so that you can get the best loan with the most reasonable rate. Your credit score is determined by various factors and if you max out your credit limit, you may be unknowingly affecting your credit limit terribly.

Credit limit facts

Facts 1 – Credit limit is nothing but the highest amount of money that a financial company allows a credit card holder to use on a single credit card. The credit limit of a person is determined by considering his credit risk. Any new line of credit will be determined on the basis of the risk that you pose to the lender. If the credit card company sees that you’re a reckless shopper, he will set a low credit limit for you so that even if you cross the limit, you’ll be charged hefty over-the-limit fees. The most important factor that is taken into account while lending new lines of credit is the credit risk as this will let you know the credit limit and the interest rates. A person’s credit risk is determined by factors like income level, stability of his job and also his credit history.

Facts 2 – The people with significant and valuable assets, little amount of debt and an exceptionally good credit history, will get a loan with more money and lower rates than the people with huge debt amount and no assets. While some companies allow the cardholders to surpass their credit limit under some specific circumstances, others may not.

Facts 3 – Credit limits offer some benefits like protecting the borrower from crossing the limit while borrowing too much money. Apart from providing the borrower with the aforementioned advantage, the credit limit also protects the lending company from being over-exposed to the reckless spending habit of the card holder. On the other hand, credit limit may also impose some serious kind of restriction on the borrower, dropping the items that he may purchase with a card. It also restricts the income potential for a lender as the borrowers will have lesser chance to exceed the credit limit.

Facts 4 -If you want to increase or decrease the credit limit on your card, you can simply call the financial institution from where you have taken out the card and make a request. If you think that you’re a compulsive shopper, it’s better to reduce your credit limit. Despite trying to change your financial behavior, if you can’t make much difference, the first step that you must take is to reduce your credit limit so that you may not cause further damage to your finances. Though you may be able to manage your personal finances by reducing your credit limit, you must also remember that this will leave you with not much available credit during an emergency. Thus, you need to be more diligent while dealing with a card that has low credit limit.

Final thoughts

If you find that you need a reduced credit limit, get in touch with your credit card company and give them the required information. Use your cards responsibly so that you need not run to credit repair agencies for improving your credit score before going to get new lines of credit.

By carol on August 19th, 2014