Credit Question

[Kishan]

About 6 weeks ago I got my first credit card- A Citi Platinum for Students with a $2k limit. In the last 6 weeks, I have spent, and paid off $700 worth of purchases. My question is, Does it matter how much I spend on this card with regards to credit limit increases, more cards, and good credit in general?

Thanks,
Kishan

 

[Mr N8]

No, just keep it active, and pay it on time. After 6 months to a year, you can request (or will be given) an credit increase.

 

[Crazymofo]

creditboards.com will have the answer to any credit question you could ever think of... usage and limits have a lot to do with your credit rating...

 

[RossMAN]

Nope.

It's important though to make all your payments ON TIME and always pay it off in full.

 

[spidey07]

no.

 

[Kishan]

Damn. So how do they know how much to increase your limit? I thought credit worked as if (I am good for this much money) or (you can loan out this much money and it will be repaid). Oh well.

Thanks,
Kishan

 

[glugglug]

Long term it doesn't matter. But if you happen to have a large balance at the moment your credit report is run it gives you a deduction for it, stating on the report that it may be an indication you are 'living beyond your means"

 

[Descartes]

The percentage of the balance to limit is termed utilization, and this accounts for 30% of your credit scoring with FICO. If your cards all have a balance that is 90% of the total, then you're taking a serious hit. Some lenders might not use the FICO, but even then they will still see it as having financial troubles, living beyond your means, etc. as glugglug said.

 

[Kishan]

Originally posted by: Descartes
The percentage of the balance to limit is termed utilization, and this accounts for 30% of your credit scoring with FICO. If your cards all have a balance that is 90% of the total, then you're taking a serious hit. Some lenders might not use the FICO, but even then they will still see it as having financial troubles, living beyond your means, etc. as glugglug said.

ok-so do they check the balance or availible credit? Between statements, obviously it will be high.

 

[yllus]

My 'How to build good credit' article based on advice I read here and elsewhere.

Take a look at the pie chart for how most credit companies evaluate your credit rating. In a nutshell: How often you use your credit isn't a factor, but the outstanding debt you leave to carry over from one credit period to the next does.

 

[spidey07]

Originally posted by: KPSHAH316
Damn. So how do they know how much to increase your limit? I thought credit worked as if (I am good for this much money) or (you can loan out this much money and it will be repaid). Oh well.

Thanks,
Kishan

I'm more concerned about why you would want to increase your limit after 6 weeks, especially as a student. It can get you in trouble.

 

[Kishan]

Originally posted by: spidey07

Originally posted by: KPSHAH316
Damn. So how do they know how much to increase your limit? I thought credit worked as if (I am good for this much money) or (you can loan out this much money and it will be repaid). Oh well.

Thanks,
Kishan

I'm more concerned about why you would want to increase your limit after 6 weeks, especially as a student. It can get you in trouble.

no, just asking in general. Will probably ask for a limit increase in about a year. Should I ask them, or will they give it to me automatically?

 

[gutharius]

Is it still possible to ask for a interest rate decrease in leau of a credit limit increase? Any tips on how one would go about this? Any negotiation tips?

 

[gutharius]

bump for answer

 

[Descartes]

Originally posted by: KPSHAH316

Originally posted by: Descartes
The percentage of the balance to limit is termed utilization, and this accounts for 30% of your credit scoring with FICO. If your cards all have a balance that is 90% of the total, then you're taking a serious hit. Some lenders might not use the FICO, but even then they will still see it as having financial troubles, living beyond your means, etc. as glugglug said.

ok-so do they check the balance or availible credit? Between statements, obviously it will be high.

Well, the bureaus that report don't actually "check" anything; instead, the creditors to which you owe money report to the bureaus. When they report, what they report, etc. is regulated by the Fair Credit Reporting Act. Some creditors report in ways that hurt your utilization; for example, Capital One doesn't report the credit limit, so I believe most of the bureaus will use your high balance as the limit.

So, to answer your question: They would be checking the balance or available credit relative to the credit limit.

 

[Descartes]

Originally posted by: gutharius
Is it still possible to ask for a interest rate decrease in leau of a credit limit increase? Any tips on how one would go about this? Any negotiation tips?

Yes. It might be as simple as just calling and asking. The better banks will likely be more giving. If you don't make any progress you could file a complaint (e.g. through PlanetFeedback) or something, but I have no experience with this. I have read that many banks do respond very well when complaints are received.

 

[spidey07]

Originally posted by: KPSHAH316

Originally posted by: spidey07

Originally posted by: KPSHAH316
Damn. So how do they know how much to increase your limit? I thought credit worked as if (I am good for this much money) or (you can loan out this much money and it will be repaid). Oh well.

Thanks,
Kishan

I'm more concerned about why you would want to increase your limit after 6 weeks, especially as a student. It can get you in trouble.

no, just asking in general. Will probably ask for a limit increase in about a year. Should I ask them, or will they give it to me automatically?

never hurts to ask.

 

[HardcoreRobot]

Originally posted by: spidey07

Originally posted by: KPSHAH316

Originally posted by: spidey07

Originally posted by: KPSHAH316
Damn. So how do they know how much to increase your limit? I thought credit worked as if (I am good for this much money) or (you can loan out this much money and it will be repaid). Oh well.

Thanks,
Kishan

I'm more concerned about why you would want to increase your limit after 6 weeks, especially as a student. It can get you in trouble.

no, just asking in general. Will probably ask for a limit increase in about a year. Should I ask them, or will they give it to me automatically?

never hurts to ask.

i thought it could? cuz right now i need to about double my credit limit... but ive only had a CC for a few months so i have been holding off

 

[RossMAN]

Originally posted by: Descartes

Originally posted by: gutharius
Is it still possible to ask for a interest rate decrease in leau of a credit limit increase? Any tips on how one would go about this? Any negotiation tips?

Yes. It might be as simple as just calling and asking.

CONFIRMED but YMMV.

I called CitiBank last year after reading a similiar article. Told them I've been a long time customer and wanted to know if they could lower my purchase rate? They said yes and lowered it to 11.99%, somewhere around there. Although now I wonder why I did that since I usually pay it off in full, avoiding any finance charges.

 

[cronos]

Originally posted by: HardcoreRobot

Originally posted by: spidey07
never hurts to ask.

i thought it could? cuz right now i need to about double my credit limit... but ive only had a CC for a few months so i have been holding off

first of all, if all of the sudden you need to double your credit limit *right now*, you might be better off without it. you might spend a lot on something you can't really afford.

that being said, asking for an increase will never hurt. the worse thing that can happen is that they denied your request.