Consumers may have tried to cut out credit card debt in the few years since the end of the recession, but in the last several months, old borrowing habits are creeping back into many people’s lives, and that could be a problem this holiday season. Numerous studies recently have shown that consumers are once again… Read More
With holiday spending expected to soar this year and some consumers using their favorite piece of plastic to front the cash, credit card balances are on the top of everyone’s mind. Since a higher credit utilization ratio (total balances to total credit limits) can hurt your credit score, balances do matter. To see if your… Read More
Since the end of the recent recession, consumers have generally been far more cautious in their approach to taking on credit card debt, and that trend continued once again in July. The overall amount of credit carried by consumers across both credit cards and non-mortgage installment loans slipped 1.5 percent on an annual basis in… Read More
Once again in June, the overall amount of money owed by consumers to their various lenders increased, but at the same time, Americans were able to slash their credit card balances. The total amount owed on credit card debts slipped 5.1 percent in June to a total of $864.6 billion from May’s $868.3 billion, according to… Read More
President Obama is meeting today with senior executives from fourteen of the top credit card companies – including Bank of America, Citi, Amex, Visa and MasterCard. This coincides with action in Congress to push forward a new Credit Cardholders’ Bill of Rights to trump the reforms coming in July 2010. According to the Washington Post
Hey Emily, Thanks for the highly informative article. I had a query regarding when the debt is calculated. You said your monthly balance is taken as the debt. What happens in the following case. I have a limit of $1,000 dollars. Every week of the month I spend $900 dollars and pay it off as soon as the amount shows up online on the bank site. Doing this I end up spending $3,600 during the month, but by the time the cut off date comes up for the card I have a balance of about $50 dollars only. So eventually the monthly bill of the card shows a balance of say $50. So in this case what is debt taken for the month. $3650 or just $50?
When your credit utilization score is calculated, what happens if you have credit cards with no limit? Does this somehow help you in that category by making it impossible for you to be over the recommended 10% utilization percentage?
Closing a credit card account will never help to improve your credit score. Credit scores give extra “points” for consumers who keep their credit cards open for a long time, who have high credit limits and who have a healthy record of using credit. You are less of a risk to lenders and creditors if you are currently showing that you can manage and pay credit cards on time.
Letting the credit card company keep that $200 safe for me just didn’t seem right. So I called into the MBNA customer service line to see if I could get the credit returned to my account. After 20 minutes on hold, I gave up and tried calling again later that night. When I finally got through to a representative, a nice woman informed me that the $200 could be sent back to me via paper check at the end of my billing cycle. What a hassle. Instead, I decided to leave the credit on my account. I’ll use up the $200 balance over the next few weeks worth on groceries and other expenses.