Have You Checked Your Credit Cards Lately?

Have you checked the credit limits on your credit cards lately?  If not, you might want to take time to do just that, especially since roughly 50 million Americans’ credit card accounts were either closed or had their credit limit cut in the past 30 days.  That’s about 1 in 4 credit card holders, and of those, men between the ages of 18-38 years old were particularly affected.

Credit CardWhat’s even worse is that lenders are not even required to tell you when your credit limit is lowered, so you may not find out until you’re ready to actually use that credit card.  Why now, you wonder?  Truthfully, this is another financial side effect of the COVID-19 pandemic.  Early on, lenders reviewed accounts, then lowered some credit limits to reduce their risk of loss if it appeared that consumers would struggle to make payments, or even use the cards to live on, as unemployment skyrocketed across the country.

Sadly, these credit cutbacks occurred just when household budgets were hit the hardest.  Not only are families using their cards frequently right now, but some are having to use them to make ends meet until unemployment funds start coming in, or to buy essential goods.

Unfortunately,  even though this makes sense for the credit card companies, it didn’t make things any easier for consumers.  But, in their defense, total credit card debt has been growing steadily since 2015, and is hovering right around $1.1 trillion nationwide.  And, even before the pandemic, delinquencies had already hit a seven year high as many families struggled to meet payments.

While we don’t have exact details, some cardholders have reported credit limit reductions in the thousands of dollars, so you’ll want to log in to every account to check your limits. Then, if you find your credit limit has been reduced, contact the issuer and request that they reconsider the reduction, or even in some cases, closures of accounts that have been dormant for some time.

In fact, you may want to consider moving a couple of small recurring payments to a dormant card, like Netflix or Hulu subscriptions, and set it up on autopay to handle payments, just so that the card is not considered dormant (and subsequently closed).  Just that one regular monthly charge will keep your credit card account active without adding any unnecessary expense to your budget, thereby  preserving the now-active card’s larger spending limit for true spending emergencies.

It’s a Great Time to Review Your Finances!

By now, many of us are getting bored with Netflix, our little home improvement projects, our hobbies, working from home, homeschooling, being laid off… the list could go on and on.  The point is, we’re all looking for different things to focus on, and as much as you might not want to, now is the perfect time to focus on your money.  I know that right now it’s much easier to just stick your head in the sand and pray that it’s all going to work out, but can any of us really afford to do that?  Seriously, if you’ve lost your job, you’re already stressing out over money, and if you’re still working?  Maybe you’re not sure how long that will last?  Either way, when you really sit down and think about it, it’s a great time to review your finances and your credit.  Yes, I know what you’re thinking… why depress yourself even further?

Actually, reviewing your finances right now might do more than depress you.  It can also give you the time to figure things out.  If you’re laid off, you can plan how you will catch up once this forced period of economic misery is finally behind us.  We’ve all heard about the economic stimulus, and the four full salaried months of unemployment that we’re being promised, but how will that fit into your life?  Can you make it work?  Can you catch up?  Or, if you’re still working, how can you use that stimulus money to your best advantage?  What can you do to get back to where you were financially before this forced shutdown.

See what’s happening?  That’s right, you’re making a plan to survive, to dig yourself out of this crazy mess that we’re all in!  If you’ve been reviewing things, you now know what you have in the bank, how much your monthly bills are, how much and where you can trim your expenses, how much credit you have available… things you probably didn’t know two weeks ago.  Things that will help you to survive once the pandemic is over and we all get back to living.  And even you have to admit that you feel just a little bit better, don’t you?

 

Want a Higher Limit on Your Credit Cards?

Ever wondered why your credit limit on your credit card is at whatever limit that it is? And how to go about raising that limit? Before the 2009 credit card reforms, it was fairly common to see people with excellent credit who had credit limits of $15,000, $25,000, or even $50,000 on some credit cards. Since then, credit limits have been scaled back so that the higher limits are usually around $5,000 or more, depending on your credit score.

Typically, those with a credit score over 750 are the ones who qualify for these cards, but there are also other tiers that most credit cards are based on:

850 to 781 (superprime): $9,543
780 to 661 (prime): $5,409
660 to 601 (near prime): $2,277
600 to 500 (subprime): $966
499 to 300 (deep subprime): $509

So, how do you get your credit limit increased?

Nearly every credit card company relies on your credit score to extend credit, but once you’ve been approved and have demonstrated responsible usage, the credit card company may utilize different criteria to determine if you’re eligible for a credit-limit increase. For example, they may ask you for updated personal information regarding your salary, they may look at your payment history (especially if you pay more than the minimum amount due), and they will likely look at your credit report.

Most of the time, assuming you have a solid history with a company, you’ll see “automatic” increases, but some companies don’t give automatic increases, and you’ll need to request an increase.

Bear in mind that requesting an increase can affect your credit score, just as having a higher credit limit that you’re utilizing to much of can also negatively affect your credit score, so use your larger credit limit just as wisely as you do the smaller one.

Best Ways to Improve Your Credit Score

Looking for the best ways to improve your credit score?

Less than perfect credit?  Maybe you missed a couple of payments?  Maybe you’ve had a bankruptcy?  A foreclosure? Lost your job, got a divorce, or worse? In this day and age, it’s easy to understand why anyone might need a quick way to improve their credit score… when I first started trying to improve my credit score, it was in the mid 400’s, and that is a very poor credit score.  In the beginning, it seems hopeless to even try… you’re afraid that you’ll never be able to climb out of the credit pit that you’ve fallen into, and it’s very tempting to just give up and accept the fact that your credit score will never be good enough to get those low interest rates… never be good enough to get that new car, never be good enough to own a home… never even be good enough to have a decent credit card with a limit more than just a couple hundred dollars… Sounds pretty familiar, doesn’t it?

All is not lost!  There are so many ways to raise your credit score!  Simply by choosing the right credit options and putting for a little effort, you can improve even the worst credit score in a reasonably short period of time.

How do you improve your credit score?

Basically, the best way to raise your credit score in the shortest amount of time is to focus solely on those areas where your credit score has taken the worst hits.  Not sure of where that is?

First and foremost, you should know your current credit score AND you should have a current, detailed credit report on hand to review in depth so that you can determine the best places to make improvements, the best places to correct missing or inaccurate information, and even those areas where you really can’t do much more than to wait for them to drop off your credit report (typically seven to ten years).

These days there are lots of credit websites that promise you access to your credit report for free, but before you sign up, make sure that it is a reputable site that not only gives you your current credit score and your full credit report, but also offers credit monitoring, fraud protection, etc., for an additional monthly fee.  Although you may not necessarily use it at first, at some point, I highly recommend that you consider signing up for credit monitoring AND actually learning to use all of the features available to you!  The monthly fee is typically less than $30.00 which might seem like a lot, but in the long run, that monthly fee is nothing when compared to the improvements that you can make simply by being able to see all of your credit information in one place whenever you want updated information.  (Those free places only allow you to see a small amount of information on a monthly or even quarterly basis, and that is not enough information if you’re really serious about improving your credit.)

Once you really start working on your credit score, you will find that you want to check all three credit bureaus regularly because your score can be very different at each one, and when you dispute something at one credit bureau, you will have to dispute it at all three because they don’t share much, if any, information!

Once you’ve signed up, and have had the opportunity to really study the detailed information that is available within your credit report, then you can begin to improve it, first by reporting any inaccuracies (disputing is easy – you just submit it online!), and then by working on two other key items:

  1. Available Credit
  2. Payment History

These two simple components of your credit score are also the two easiest components to improve and they’re also two of the most important factors in the calculation of your credit score, so let’s start with what you can do to improve them!

The best ways to improve your available credit and your payment history!

One of the absolute best ways to improve your available credit when you don’t have a lot of cash is to simply to pick the right credit source, apply for an unsecured credit card, and then keep the majority of your available credit balance open on the card.  What if you can’t qualify for any credit cards?  Will a single $300.00 available credit balance be enough to really improve your score?  That depends.  If you have no credit history, having an open $300.00 line of available credit will certainly help your score.  But, if you’re actually trying to improve on a bad credit score, there’s a better way.

“Store” or “catalog” credit cards are the easiest credit cards to get, especially if you have bad credit – and yes, before you ask, some of those credit “cards” are better than the others when it comes to improving your credit score.  (Not only has this been my personal experience, but that of millions of other Americans, as well.)  So, what’s our recommendation for the best store/catalog credit card?

Fingerhut is the best store/catalog account to use for improving your credit score!

That’s right, Fingerhut.com is the best store/catalog account to use when you’re trying to improve your credit.  Why do we recommend Fingerhut?  Well, lets start with the features Fingerhut say that you can expect when you open a Fingerhut account:

Find out instantly if you’re pre-approved with a Fingerhut Credit Account issued by WebBank .

  • Build your Credit with Fingerhut!
  • Shop Great Brands.
  • With a WebBank/FingerHut Credit Account, buy favorite brands with low payments.*
  • Apply for Fingerhut Credit today. Fill out our easy online application.

Now, here are the benefits that Fingerhut doesn’t tell you about:

  • Fingerhut regularly reports the status of your account to at least one of the three major credit bureaus.  This status includes not only the balance due on your account and if your payments are made in a timely manner, but they also report your available credit, and that’s what we’re trying to improve.
  • Fingerhut regularly reviews your account to see if you are making your payments in a timely manner, how much you’ve paid, etc., and if your account is in good standing, they may offer you a credit line increase of a couple hundred to even several hundred dollars!  That’s right, it’s been my experience that Fingerhut will significantly raise your credit limit the more that you use the account to purchase items and as long as you make regular, timely payments.  And that significant credit limit can also significantly improve your credit score!
  • Fingerhut offers an interest rate on purchases that is often equal to, or even lower than, other store/catalog sites and even many credit cards.  Especially if your credit is less than perfect, you are likely paying as much as 33% and even as high as 39% interest on some credit cards – a typical Fingerhut account will be in the mid to slightly up 20’s when it comes to your interest rate.
  • Fingerhut does not charge a monthly or even an annual fee simply for having an account through WebBank.  Compare this with other store/catalog sites and most credit cards and you’ll see just what a benefit this is!
  • Fingerhut offers brand name merchandise at reasonably competitive prices.  Yes, you may sometimes pay a little more than you would at your local big box or discount department store, but you will also find that you will oftentimes pay less than at other catalog/store sites, and even at some of your local retailers.  Ordering is fast, easy, and your order is shipped promptly… right to your door!
  • Check out Fingerhut now to see how fantastic their site really is!

Still think you can’t improve your credit score?  

It’s far easier to improve your credit score once you actually get started.  My low credit score kept me from so many things… but once I really started studying my credit report, once I removed the inaccuracies, and once I made a real effort to improve my score, it didn’t take near as much time as I thought it would… and improving my score not only helped me to purchase a new car at a low interest rate, but two years ago, I bought my first house!

What are you waiting for?  Get started today!