Wednesday, October 31, 2012

Credit Card Limits - Reasons For Reductions And Ways To Fix Them

Credit limit reduction is a baffling issue for most cardholders. Sadly, a bank can reduce the permissible limit even without notifying you. Generally, it may happen in two cases - if you have not used your card for few months or your credit score has been poor for several months. The extent of reduction is subject to terms and conditions of the bank.

However, this issue can be dealt with successfully. All you need to do is to follow certain things in this regard. Here are some important things that will help you know reasons behind credit limitations and ideas to fix them.

To begin with, you should contact your bank to know about possible reason behind credit reduction. If it reasons poor credit ratings as a potential factor for the reduction, then you should try fixing them. For this, consult credit bureau agencies and ask for your credit reports.

Generally, the reports detail outstanding balances on your cash card. If they are really worth fixing, consult your bank and explain your financial standing. If there has been increment in your income lately, do mention it to your bank. A growth in income is a surefire way to keep your bank from lowering your credit limit.

Terms and conditions regarding the limit reduction differ from bank to bank. For instance, HDFC Bank reduces the limit, if you may have not used your card for few months. Axis Bank reduces the limit, if the cardholders violate norm regarding good credit standing. This means, if you continue keeping your credit rating poor for several months, the bank may reduce your credit limit up to certain extent.

You should use your card wisely. Do not indulge in overspending. Make sure you are using your cash card at least once in a month. This will convince your bank that your card is being used. The issue of credit reduction does not occur, if the card is used frugally and in needs only.

Why banks lower down credit limit?

Basically, the banks reassess their risk tolerance occasionally. For this, they apply unexplained reductions to maintain their credit card standards. They also impose key terms regarding the reduction. For example, if outstanding balance is not paid on time for several months, the reduction follows. As said before, these terms differ from bank to bank.

So, you should avoid carrying huge outstanding on your card. Do not overspend it. Pay your balance on time. Always keep your credit balance as low as possible. They are some effective ways to avoid facing reduction on your card.

Dinesh Jha has been working as SEO content writer for years. He writes articles on various topics including finance, health subjects, credit and others. He is also freelancing his work as ghost writer for various clients.

Saturday, October 13, 2012

Why Credit Cards Can Get Suspended

Making purchases on a daily basis is a common form of consumerism that keeps local and global markets at successful levels of health. People often discover that cash flow is difficult to keep up with at various points in time which makes it necessary to use lines of credit and borrowed funds to make any purchase of interest. Consumers that are focused on this effort and need to make adjustments should learn how to improve your credit rating in just three months.

Credit ratings are the numeric indication of how successful a consumer is at managing their debt and paying back their borrowed funds. Lenders focus most heavily on this indication when considering approval decisions in offering additional funds to their applicants. People that suffer from negative scores or wish to simply increase their current ones are often provided with a multitude of helpful suggestions and processes.

Improvement efforts that people consider are often focused on speed and effectiveness. Consumers discover that attempting to increase their overall ratings is much more difficult than they imagined which leads them down the path toward finding the best possible options. The quickest efforts are completed by following several basics steps.

Perhaps the most initial phase of this process should be centered on the ability to retrieve a credit report. A large percentage of consumers are unaware of what is on their reports which leads to confusion as to where they stand within the rating system. Many options are available to receive a copy for free which should be taken advantage of.

Consumers should also consider the idea of hiring a professional to guide their efforts. Many attorneys and debt counseling companies offer tailored programs to help consumers that are attempting to improve their general ratings. Many services offer money back guarantees and highly efficient results.

People should also make sure that issues are corrected immediately. Mistakes are often made by creditors and reporting agencies that significantly impact the numeric rating that has been amassed. The correction of any errors generally leads to a drastic score improvement instantaneously and with very little effort in most cases.

Paying off smaller balances immediately is another common suggestion when learning how to improve your credit rating in only three months. Paying off smaller balances decreases debt to income ratios and helps establish the viewpoint of having the ability to pay. The smaller balances are easier to manage and should be centered in on initially.