Choose one card to request an increase on. This credit pull will be noted on your credit report and will slightly lower your credit score.
Updated on 16 December 1 Comment Share the love Putting too much money on your credit card can get you into trouble. Last week, I found out I was on the verge of having my credit card blocked. Had I gone over my limit? Had I failed to make the necessary payments?
Far from it - in fact, it was because I tried to put too much money on my card. This is what happened. However, I was told that if I did this, the card would probably be put beyond my use.
It's funny how things turn out. A day later, a Fool reader contacted us with a strange situation she'd like us to chase up - involving the overloading of her credit card.
The lady in question explained that her credit card had suddenly stopped working. The bank cited recent changes to money laundering regulations by the Financial Services Authority FSA as the reason her card was blocked. We decided to look into this.
FSA regulations There are indeed FSA regulations related to money laundering and suspicious transactions which affect how credit-card providers deal with customers with overloaded cards. In August last year, these regulations were simplified and became more principle-based, explaining that fraud prevention action should be "comprehensive and proportionate", but giving banks and credit-card providers certain freedoms in how they operate their fraud prevention schemes.
It seems that these were the changes referred to. Simply put, credit-card providers are allowed to block the use of a particular card if they think it is being used for money laundering purposes or other fraudulent activity. How does it affect you and your credit card?
To find out more about how providers interpret these regulations, I contacted several major card providers. Here's what I found: All banks either implied, or told me outright, that if a customer does this, his or her card activity is likely to be carefully scrutinised.
HSBC, for example, described such behaviour as "unusual activity".
In certain circumstances your card may be blocked before you are informed of the fact. No provider said they would definitely block a credit card if it had a small positive balance.
For example, both Lloyds and MBNA told me positive balances on credit cards were allowed, although not encouraged.
Obviously this could prove disastrous, especially in a situation where your credit card is your only means of payment. I can see why lenders are twitchy about overloaded cards. Fraud and money-laundering are obviously a huge cause for concern, and credit cards make it very easy to move money across borders without the relevant checks.
The big question is whether providers will try and make some money out of this. Following this year's big story about unfair penalty charges for credit cards and overdraftsyou might think that credit card providers are looking for other ways to fill their coffers.
All the banks I spoke to assured me they do not charge a fee if credit cards are overloaded. However, it's definitely worth keeping an eye on things.
· If the credit limit was very low (like on a retail store card) and you don’t have credit card debt elsewhere, the impact is likely to be almost meaningless.
Prevention is Key If this is a concern for you, there’s a way to prevent all of plombier-nemours.com://plombier-nemours.com For example, let’s say you want $1, worth of living room furniture, but don’t have the cash to pay for it immediately.
If you charge the items to a credit card with an 18 percent interest rate, and cover the balance in four months, the finance fees would total just $plombier-nemours.com › Credit Cards. · Accounts closed in good standing don’t disappear — in fact, they generally stay on your credit report for 10 years after the date of your last activity.
So if an account is closed after being plombier-nemours.com · But don't let this blind you for the rest of your spending: make sure you maximise what you get elsewhere too (it may be worth having two cards).
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Credit Cards And Students Can Lead To Debt: Don’t Let That Happen To You by Laura Agadoni / 0 Comments / Mar 30, Credit cards and students often go together because students and young people are far more likely to use plastic to pay for items, even for small purchases that cost less than $5, than they are to use plombier-nemours.com://plombier-nemours.com Keep in mind, if you’re under 21, according to the Credit Card Accountability Responsibility and Disclosure (CARD) Act of , you either have an adult co-signer or show that you make enough money on your own to repay any money you spend on your credit plombier-nemours.com://plombier-nemours.com