I’m Near My Limit, Do I Need to Be Careful?
Most people know that their credit card has a spending limit for a reason. Otherwise, people could charge a yacht to their card and then disappear into the sunset on a cruise around the world. But what many people don’t realize is the cost associated with going over the credit limit. There are fees to be paid, a negative report to your credit bureau and a possible decrease in the chances of getting a good mortgage down the road. Let’s take a closer look at your credit limit and how you can avoid busting through the line.
The first thing that happens when you overspend your credit card limit is that you are given an overlimit fee. The fee varies from credit card to credit card, but it is usually varies from 25 dollars to as high as 50. While getting a single over the limit fee isn’t the end of the world, no one wants to be fined by their credit card for a simple mistake. There are a few things you can do to try to warn yourself that you are getting near to your limit.
Make sure you open your credit card statements as soon as you get them. With the time it takes for mail to travel from one end of the country to the other, the balance on your statement won’t be completely accurate if you’ve used your card in recent days, but it can give you a good ballpark figure. If you are near your limit, hold off on using your card anyone until your next payment clears.
You can also sign up for email alerts from your credit card company that let you know when you are getting close to your limit. Not every card company offers these little gems, but they are proving to be quite valuable and more and more companies are starting to offer them. Make sure that the email can get through your email client’s spam filter, otherwise, the warning is going to go right in the trash.
If your card company doesn’t offer email alerts, it wouldn’t hurt to put your card’s 1-800 number on speed dial so you can call and use the automated system any time you want to check your balance. With the proliferation of cell phones, having the ability to check your balance at a moment’s notice is simple.
If you prefer the computer to the phone, most credit cards also have the ability to check your balance and pay your bill online. Bookmark the website for your credit card and if you are planning on leaving to go shopping, sit down for a moment and check your balance. Remember, however, that transactions usually take 2-3 days to clear, so make sure you add any recent transactions over the last few days to the balance you see on the screen.
If all of those warning mechanisms fail, you should just remember the fact that by ruining your credit, you are also ruining your chances of getting credit cards with better rates, as well as seriously damaging your chances of getting a good mortgage. All of those things are tied together on your credit report. By taking care of your card’s limit now, you are ensuring a bright credit future for yourself.