Finance Source

7 Simple Ways to Increase Your Credit Card Limit

2008-02-24T11:07:00.005-06:00

Many credit card holders aspire for a higher credit card limit. The obvious reason for this is that a higher credit card limit enables the purchase of otherwise unaffordable merchandise.

First and foremost, credit card holders need to remember that to get a higher credit card limit, they must abide by the terms and conditions of the credit card company or bank.

Below are 7 other ways to get a higher credit card limit.

1. The most important thing to do for getting a higher credit card limit is to prove your credit worthiness. This is the first thing that banks and companies look for when giving a higher credit limit.

2. Attract positive attention from the credit card company or bank by paying finance charges once in a while. Obviously, this is not advisable on a repeating basis and should only be used as a last resort to increase your chances of getting a higher credit limit.

Proving to credit card companies and banks that you are good "borrower" can be a convincing way to get a higher credit limit. But be careful because this strategy also means that you will be paying finance charges which can accumulate in a hurry.

And always remember, a higher credit card limit means greater purchasing power, but it also increases the risk of your having to pay greater interest charges and other processing and late fees.

3. Always spend within your credit card limit because doing so means that you are capable of controlling your expenses.

4. Use your credit cards regularly. Don’t keep your cards for emergency use only. If you use your credit cards sparingly, banks and credit card companies will be unable to understand your spending and pay-back behavior. Under these circumstances, most banks and credit card companies will be reluctant to give you a higher credit card limit.

5. Never make minimum payments. Instead, try to pay for the entire outstanding amount. This will usually give you a better chance of getting a higher credit card limit.

6. Avoid late payments as much as possible. Not only will your increase payment increase, but you may also have to pay an additional fine for not clearing bills on time. This will also dim your chances of getting a higher credit card limit.

7. The best and simplest strategy for getting a higher credit card limit is to use your credit card wisely. Always keep in mind that credit card companies keep a record of your transactions and payment patterns, so always pay on-time.

The bottom line is that your performance in the records of banks and credit card companies will determine whether you’ll get a higher credit card limit or not.

About Payday Loans

2008-02-24T11:06:00.006-06:00

You can’t go far these days without seeing a Payday Loan offer. Some come in the form of an actual store (often times found in strip malls or in the parking lot of regular malls) while other offers are presented exclusively on the Internet. But what exactly is a payday loan?

A payday loan is normally a very small loan (under $1,000). Unlike regular loans, payday loans rarely require a credit check. The terms on payday loans are much shorter than other loans and the borrower is usually required to pay back the loan in full within anywhere from two weeks to two months. Payday loans are marketed as a way to get fast cash to hold the borrower over until their next paycheck.

When a borrower applies for a payday loan they are required to present the lender with either a post-dated check or permission to debit their bank account on an agreed upon future date. The finance charge is almost always very high and often comes in the form of a fixed dollar amount as opposed to an interest rate percentage that is found with a standard loan. Many payday loan companies are not licensed or regulated by consumer laws and will charge the borrower the maximum amount that they think they can get. Payday loans are generally very costly for borrowers and should be avoided if possible.

If you do find yourself in an emergency situation where you need to use the services of a payday loan company, then it is absolutely imperative that you repay your payday loan as soon as possible. If you’re unable to repay your loan at the end of the agreed upon term, you’ll be charged hefty fees in addition to the initial finance charge. Payday loans are much more expensive than other borrowing options. The average APR (annual percentage rate) on a payday loan is somewhere around 400%, however, it’s often as high as 5000%! If you have a credit card with available credit, you are almost always better off taking a cash advance from your card, as opposed to getting a payday loan. Even the highest credit card APR out there isn’t nearly as high as most payday loan rates.

Now that you’re aware of the potential pitfalls of payday loans, you can decide whether or not it is the type of loan product that fits your needs. Payday loans can be beneficial if you’re in need of fast cash in a pinch; however, be prepared to pay the price!

It Takes Credit To Build Credit

2008-02-24T11:04:00.002-06:00

Using a credit card wisely is an important step in building a good credit rating. If you're trying to re-build your credit or if you're young and just starting out, pay close attention the next time you receive a new card offer in the mail. When you're trying to build a positive credit history for yourself, using the right credit card makes sense. Making small purchases and then making your payments on time each month is a simple, reliable way to build an outstanding credit report.

What to Look For On a Credit Card Application

If you receive a credit card application that appears to offer a low monthly interest rate, don't make a decision until you turn it over and closely examine the Disclosure Box. In it you'll find a more important measure of credit terms - the Annual Percentage Rate, or APR. By federal law, the Disclosure Box will also tell you whether or not the card has what is called a grace period - a number of days, usually 25, until your purchase starts to accrue finance charges. If a card has a reasonable grace period and you pay off your balance at the end of each billing cycle, you won't have to pay finance charges. It isn't difficult to find credit cards that offer these grace periods, so if the Disclosure Box doesn't declare one then throw the application in the trash and look for a better offer.

If you don't have any credit history at all, a credit card company won't want to give you a very high credit limit, but that's probably best when you're just starting out. You don't want to be tempted to go into serious debt with your very first credit card.

Calculate Your Monthly Finance Charges

Ideally you want to pay off your balance each month to avoid paying any finance charges, but when that isn't possible it's important to know the actual cost of the items you purchase. The annual percentage rate, divided by 12 months, gives you the periodic rate that will be applied to your outstanding balance each month. You can estimate what your monthly finance charge will be by multiplying the periodic rate times the outstanding balance. It may sound complicated at first, but taking the time to learn this simple equation can make a big difference in how you use your credit card.

When you're able to see how much you actually spend on an item that you don't pay off at the end of the month, it might help you to resist the temptation to over-use your card. An item that you want to buy might be on sale at the time you purchase it, but if you don't pay off your balance at the end of the month then those finance charges can dramatically increase the actual amount you'll end up paying.

Use Your Credit Card as a Tool

Credit cards are only one of the tools available to help you build a positive credit history. Making on-time payments for other forms of credit, such as rent and utilities, are also important. Depending on your situation, within 1-2 years your credit rating will be improved enough that you no longer need to use your card for new purchases to maintain your good credit. Use these tools wisely, and they'll help build your financial future!

Preventing Credit Card Fraud - 12 Top Tips

2008-01-21T04:58:00.000-06:00

Many people enjoy the convenience of paying for goods and services with a credit card. Unfortunately, some people become victims of the growing problem of credit card fraud. The first you may know of fraudulent activity on your credit card account is seeing unauthorized transactions on your statement.

Here are 12 simple steps to minimize the possibility of fraud on your credit card account:

1. Keep both your personal and credit card information secure. Never email your credit card details. Email is not a secure method of transmitting data and can be intercepted by criminals.

2. When you receive a new credit card always sign it immediately.

3. When you receive a replacement credit card always destroy the old card immediately. Cut the old card into at least three pieces.

4. Make sure you thoroughly destroy old receipts that have your card details printed on them. The most effective method is to use a shredder.

5. Open and read your credit card statement as soon as you receive it. Check to make sure you know what all the payments printed on the statement were for.

6. If you see transactions on your credit card statement that you do not recognize, immediately contact your bank or credit card company.

7. If you cannot find your credit card for any reason, immediately telephone the card issuing company and tell them. They will block the card to prevent any unauthorized use.

8. Never tell anyone your Personal Identification Number, which allows cash withdrawals using your credit card.

9. Make sure your Personal Identification Number is not easy to guess. Avoid using numbers that are easy to trace, for example do not use your date of birth. Ensure you use a different Personal Identification Number for each individual credit card.

10. Do not use an ATM if you suspect it has been tampered with. Report your suspicion to the bank that operates the ATM.

11. When you use your credit card in a retail store always keep a watch on your card while the clerk processes the payment. Double check it is your card that is handed back to you.

12. If you use your credit card to make online purchases, always ensure the web page where you enter your credit card details is secure. A secure web page has a URL that begins https:// and an image of a locked padlock in the bottom right hand corner of the browser window.

Following these simple precautions will reduce the possibility of you becoming a victim of credit card fraud. Your bank or credit card company may have further information on minimizing the risk of credit card fraud, so it is worth contacting them.

You Can Write Put Stock Options And Get Paid Right Away

2008-01-21T04:54:00.000-06:00

There are two items in our everyday lives that are normally considered a necessity. Shelter and mobility. So it follows that - most everyone owns a car, and many people have purchased a home.
In addition to requiring money, these purchases share another trait. They both require that you protect these assets with insurance. In fact, coverage is required by law or lender to offset any damaging and catastrophic events that might jeopardize repayment.

By the same token, there are individuals who, having purchased shares of a company's stock, choose to insure their stock holdings against catastrophic drops in share price or outright market collapse.

Essentially, these investors are "hedging" or offsetting their potential stock gains. To do so, they pay a cash premium to buy insurance and guard against potential stock losses. Just as we guard against damage to our cars and houses.

There is one appealing difference, however. Your house and your car are insured by companies that specialize in providing this service. And these companies are usually big business firms. And Warren Buffett owns one of the largest of these insurance companies. So, why would he chose to buy and own an insurance company?

For a very specific purpose. All those insurance payments being paid to his firm, to cover all those houses and autos, bring in cold hard cash every month. And that continuing cash stream allows Mr. Buffett to reinvest, leverage, and compound that cash into bigger and bigger profits.

Done wisely, prudently, and selectively as he has...well you too could be on your way to returns you never thought possible using only conventional investing strategies.

And the great thing is, unlike those corporate auto and home insurance providers, but just like the great Mr. Buffett, stock insurance can be written by individual investors. You don't have to be a company - large or small - to do so. All you need to is get approved by a reputable discount brokerage, which is not difficult, and away you go.

Here's what happens when you write "insurance" for a stock to immediately get cash deposited into your account:

The first activity is essential. Identify a stock as one you wouldn't mind owning, because that could be the result.

Next, you simply write or "sell to open" a "put" contract on the associated stock's option. Next thing you know, a premium - also known as cold hard cash - will immediately be deposited into your brokerage account.

Now remember this: one put option contract represents 100 shares of a company stock.

For example, XYZ stock is currently selling for $21.00 a share. At the moment, cautious investors are willing to pay $1.00 in insurance "premium" for every $20 put option contract.

They do this to insure themselves against losses should the stock drop during a predefined time period. Well call it one month in this example. In reality, this time period may range from less than a full day up to a couple years.

You, as a writer or seller of this "put" insurance, guarantee that you will buy those 100 shares should the stock fall below $20 anytime during this month long time frame.

If the stock closes above $20, at months end, the contract expires, and you simply keep the $100 that was deposited into your account when you sold the "put". If the stock closes below $20, you agree to buy the 100 shares per contract.

So instead of just one contract, writing (selling to open) 10 "put" contracts would result in $1000 in premiums paid to you for your obligation to buy 1000 shares of XYZ should they be assigned to you.

Just as you may have to buy the shares, should they fall below $20, during that month long period, alternatively, you can also close your position at anytime, if you choose.

For example, the stock price may be at $20.50 halfway through the month. You can "buy to close" the position and keep some portion of the $100 deposited premium as cash profit.

Conversely, the stock price might be below $20; say its $19. In that case, the shares may be "put" to you, making you a proud new owner of 100 XYZ shares.

Because you knew about the company and liked its prospects, and you had the cash to cover the purchase of the shares, you don't mind owning the stock. On top of that, because you were paid $1.00 in premium per contract. your effective purchase price (before commissions) is $19.00, instead of $20.00.

At this point, since you own the shares, you might write "covered calls", obligating you to sell your shares at a certain price, again being paid a cash premium. But, that's another approach and another article.

So now you have the basic idea of how to write insurance for stocks which allows you to get immediate cash deposited into your account. Plus, you can buy stocks for less than you might have otherwise. Warren Buffett does this. Perhaps you should, too.