Credit card Q&A: “What credit card limit can I get?”

Consumers are often curious about what they’ll qualify for in the way of a credit card, if approved at all.

Unfortunately, it’s always a bit of a mystery until after you apply and receive your credit card (and its related terms).

But you can certainly clue yourself in a bit before you apply.

Credit card issuers tend to look at two main things, including your credit score and your income.

It used to be household income, but now it’s just your income, since living with your wealthy parents doesn’t necessarily mean they’ll pony up if you can’t pay your debts.

Credit card companies also ask for employment information (and schooling prior to that) to get a better idea of what you make, considering the fact that you simply state a number on the credit card application.

They then take this information and look at it alongside your credit score, along with the information in your credit report, to determine your credit card limit.

Lower Credit Scores and Income = Lower Credit Card Limits

Generally, those with lower credit scores and lower gross annual income will receive lower credit card limits, and vice versa.

So a consumer with an average credit score and low income who applies for a credit card may receive a $3,000 credit card limit, while a consumer with an excellent credit score and higher-than-average income may receive a $25,000 credit card limit.

Of course, it’s hard to just say you’re this, so you’ll get that.

The takeaway is higher income and credit scores equals higher credit card limits.

Additionally, those with limited credit history will see lower limits than those with proven track records of supporting large amounts of debt, so understand that it takes time.

Keep in mind that charge cards don’t have a pre-set spending limit, but must be paid in full each month.

Tip: Having a lot of outstanding credit card debt can lower your credit score, so it’s best to keep balances to a minimum, regardless of your credit card limit.

People in rural areas of Australia are spending more than those who live in metropolitan locations, according to a new study.

The ANZ Small Business Sales Trends series found that regional and rural small businesses had seen a 1.9 per cent growth in trade during April 2011.

This is in comparison with the minus 0.1 per cent that it saw for firms that are based in bigger locations.

ANZ head of economics and property research Ivan Colhoun explained that the results are found by processing the value of credit card and eftpos transactions seen in the banks system for firms with an annual turnover of $5 million or less.

Mr Colhoun said it is likely to be down to Australias two-speed economy, with “regional areas in general benefiting more from the commodities boom and metropolitan centres arguably more impacted by the Reserve Banks restrictive monetary policy”.

A recent study from the Australia Institute suggested that many consumers are using their debit cards and other payment options to save money by shopping online.

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Millions of Americans have credit cards, and most do not use them responsibly. In fact, the majority of credit card holders do not even know how to use their credit cards responsibly, but does the very fact of having a credit card and a credit card limit available to spend make some customers spend more? Some experts say yes, even if the borrower knows that they will end up paying a great deal more on money they spend with their credit card. The fact is, many people unconsciously factor in their credit card limit when they think about how much money they have to spend, and if they have already spend their paycheck, the credit card is a temping option when they want something.

This question has been the focus of heavy debate for years.

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A new study from credit analytics company SubscriberWise revealed that less than two tenths of one percent of the scorable population achieved the highest possible Fico score.

So just who are these consumers with 850 Fico scores anyways?

Well, the company found that the median age of these credit-elites was 61, having a birth year all the way back in 1950.

The oldest person to achieve credit score-perfection was born in 1922, while the youngest was born in 1967.

In other words, it takes a while to achieve a perfect credit score, even if you’re doing everything right.

This probably has to due with the fact that credit scoring takes into account the length of a consumer’s credit history, including the age of their oldest account on their credit report, whether it’s opened or closed.

So you really need to build your credit history early on to ensure you have excellent credit in the future.

Simply paying bills on time, keeping balances low, and applying for new credit sparingly won’t be enough for that perfection you seek.

Some gray hairs also seem to be a necessity…

For the record, the SubscriberWise study was based on data from a quarter of a million credit reports, so it seems pretty thorough.

Tip: How to raise your credit score.

  My sister Kim has a classic case of ADHD, and, as a result, she is always forgetting her wallet. She often zooms from one room to the next, absorbed in whatever task or great big plan she has on her mind, and leaves a trail of personal belongings in her wake: Wallet, keys, hair band, hair brush, shoes …   She has locked herself out of her car so many times that she has perfected the art of opening the car door with a clothes hanger. And when she got married two weeks ago, her infinitely patient lover promised in his vows that every time they left a room, he would recite the same checklist he has uttered for the last six years: “Cell phone … wallet … keys.”   But if mobile wallets actually start to take hold in the U.S. in the next couple of years, my new brother-in-law may finally be able to shorten that list.   Yesterday, Read full article…