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Credit Limit

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Credit Limit

Old 1st Oct 2021, 19:37
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Credit Limit

Now for more years than I care to remember I haves bought all my day to day purchases on a credit card and each month paid it off IN FULL so I do not pay interest. The benefits to me is that it's not my money day to day and I get cashbook usually 0.5% or occasionally 1%....so far so good and I usually get credit limit increases that i do not ask for...to encourage me to spend more...
Now my latest Card wrote to me and said they were reducing my limit...I queried why and was told so it was closer to my normal monthly spend....
I replied what does it matter to them as it's up to me to clear or pay their 28.9% interest. ..
ultimately they have agreed to reinstate my limit.
The cynic in me thinks they wanted to pi $$ me off so I move to a n other issuer as they make absolutely nothing out of me, and give me 0.5% for the privilege. ..
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Old 1st Oct 2021, 20:36
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Originally Posted by Archive mole View Post
They will make plenty off the merchant fee on each purchase you make.
I had the same thing happen with BoA a while back, limit reduced from $50,000 to $20,000 on two cards. But so what? I always pay it off and I was never going to spend that much anyway.

Last edited by Winemaker; 2nd Oct 2021 at 00:50.
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Old 1st Oct 2021, 20:47
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In the USA, credit card companies are responsible for covering fraudulent charges. Their financial exposure is less if the credit limit is lower. So folks who aren't using the high credit limit (and thus not financially benefitting the card company) may have their limit reduced.
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Old 2nd Oct 2021, 00:11
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It could be the bank reducing its liability by lowering the amount of unsecured credit they are on the hook for. They might have been approaching a regulatory limit and simply chopped your credit limit along with a few thousand others, in order to stay under it.

They are better off giving high limits to people who use them.
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Old 2nd Oct 2021, 00:28
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I had Wells Fargo cancel my credit card way back when because I paid it off in full each month.

They told me that I wasn’t the sort of customer they wanted.

Pity. I rather liked the picture of a team of horses pulling a stage coach on the card.

I was making next to nothing at the time, and would have been hit with exorbitant interest rates if I’d been late in my payments.
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Old 2nd Oct 2021, 00:41
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Credit card companies do hit up the seller of whatever you purchase with a fee, up to 3%, so not only do you have to pay them an outrageous level of interest if you are late in paying the credit card company, they’re skimming profit off the top of wherever you do business.

It is my impression that using a debit card does not cost your local merchant anything, but I could be mistaken.
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Old 2nd Oct 2021, 00:54
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From a quick web search, https://higherstandards.net/debit-ca...chants-prefer/
These rates won’t change over time, either; the Durbin Amendment of 2010 caps interchange rates for regulated debit cards at 0.05% + 22 cents. (Plus processing company fees, of course.) Credit cards have no similar cap, so their rates may (and do) go up over time.
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Old 2nd Oct 2021, 01:04
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I had a Wells Fargo business cheque book. Erm, Check book there, I think. The wild West pictures were lovely.

I was a premium customer with Lloyds and Barclays for over 50 years. I was one of the first people (still living) to have bank cards. I liked my cards to have a high limit to (ha ha) cover emergency issues in the US. One day a sensible sounding man from Lloyds fielded my indignant questions about having my card put down to 10k or so. One of the points he made was that the bank had to plan cover for everyone hitting a high month at the same time. I had to agree, that just could be one heckovva chunk of change.
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Old 2nd Oct 2021, 02:09
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Then again, as pretty as their card was, they managed to gallop off into the sunset while conducting outright fraud on their depositors:

NEW YORK, Oct 1 (Reuters) - A federal judge on Thursday rejected Wells Fargo & Co's (WFC.N) bid to dismiss a lawsuit claiming it defrauded shareholders about its ability to rebound from five years of scandals over its treatment of customers.

The fourth-largest U.S. bank has operated since 2018 under consent orders from the Federal Reserve and two other U.S. financial regulators to improve governance and oversight, with the Fed also capping Wells Fargo's assets.

Shareholders said bank officials falsely claimed in TV interviews, analyst calls and congressional testimony that the bank was mending its ways, when regulators actually viewed its progress as "deficient" and "unacceptable."

U.S. District Judge Gregory Woods in Manhattan said the shareholders plausibly alleged that some statements by various bank officials, including former Chief Executive Tim Sloan, were "deliberately or recklessly false or misleading."

According to shareholders, San Francisco-based Wells Fargo lost more than $54 billion of market value as the truth was gradually revealed over a two-year period ending in March 2020.

Woods also dismissed claims against current Chief Executive Charles Scharf, saying he was not culpable for the challenged claims.

The scandals prompted Warren Buffett's Berkshire Hathaway Inc (BRKa.N) to shed nearly all of its 10% stake in the bank.

"We will continue to vigorously defend the litigation and strongly disagree with the claims," Wells Fargo said in an email.

Sloan's lawyer Josh Cohen said in an email on Friday that his client's statements were truthful, and that Sloan "worked tirelessly to bring Wells Fargo into compliance with consent orders and regulatory demands."

The decision is a setback for Wells Fargo's rebound from revelations including that it opened about 3.5 million accounts without customer permission, and charged hundreds of thousands of borrowers for auto insurance they did not need.

Wells Fargo has paid more than $5 billion in fines, and the Fed's $1.95 trillion asset cap restricts the bank's growth.

Sloan stepped down abruptly as chief executive after 2-1/2 years in March 2019. One year later, Wells Fargo canceled a $15 million bonus for him.
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Old 2nd Oct 2021, 02:50
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American Express at one time had no limit. So one day in the late 80's I purchased 4 tickets on the Concorde for myself and my family (France to JFK, then PanAm 1 to SFO). When I arrived home the phone was ringing as I opened the door. It was American Express asking when I was planning to pay the account. I replied that I would pay when they billed me.
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Old 2nd Oct 2021, 08:42
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Credit cards are one of the banks most profitable products. They get the customers for annual fees, interest, late payment charges and screw them on the exchange rate when foreign purchases are involved.

They get the merchants for 2-5% of the transaction price. Tie ups and co branding with various companies bring in even more money.

Card holders get a few benefits such as recourse in the event of non delivery of promised goods or services, and rewards programs but the balance is firmly in the banks favour.

Unfortunately credit cards are a necessary evil these days, try renting a car without one. A single card with a low limit and no frills, paid off automatically each month is the way to go. Preferably one that offers 1-2% cash back on transactions. Only use it to your advantage eg supermarket will be the same price either way but other retailers may give a cash discount. Avoid paying anything in a foreign currency and avoid the option to pay in your home currency which is an even worse rate. A preloaded debit card such as Revoult gives a much better exchange rate and greater protection against fraud.
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Old 2nd Oct 2021, 10:02
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Card holders get a few benefits such as recourse in the event of non delivery of promised goods or services,
Currently running at 5 months to get ones money refunded (VISA) and, when circs changed, and I wanted a higher limit, I was going to have to apply as if for a new account. ISTR that in the 70s they increased the limit themselves avery time I got near it, wnnt from £200 to £1200 over a few months.
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Old 2nd Oct 2021, 17:28
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I find it a complete waste of time trying to apply logic to the policies of insurance companies and financial companies. I recently decided to buy an electrically assisted pushbike. As they are in short supply at the moment so I have had to get one on order and have paid a small deposit so far. At this point I was reminded that I was recently contacted by my bank telling me that I qualify for one of their Platinum range of credit cards. They have a choice of three, all offering 0% interest for one service or another and I decided to apply for the one that has 0% interest on purchases for 15 months. It seemed to be a sensible move on my behalf as I have sufficient funds in one place or another to buy my new bike outright but all of the places I might take it from are paying me something while the funds are in the accounts, 0% for 15 months keeps my other investments working for me. So I went on line and tried to fill in the forms but came unstuck when I tried to put £0.00 in the box asking what I contribute towards rent/mortgage on the house I live in. This is a true figure, we paid off our mortgage many years ago. The entry of zero caused the application process to crash the web browser tab. So I rang the bank helpline and they offered to ring me back and fill the form in for me and an appointment was made for the call from them 10 days later. So, in the meantime, I applied for another 0% credit card from the "patron saint of underwear" chain of shops and it came a few days later. Unfortunately it came with a £2K credit limit which is insufficient to purchase my bike. I rang them and they have a policy of starting every card at £2K and then allowing a review after 6 months, no good to me my bike is due in a couple of weeks. So I took the call from my bank fill to in the application and they queried my recent financial activities, specifically that I didn't get paid for last two months. I am normally sell employed and have taken a couple of months off to work on our house while keeping away from the company I contract for as they are still working skeleton staff due to covid furlough plus it is cheaper for me to take time out and do the job than get a bathroom makeover done by a professional outfit. They can see my actual financial reserves but turned me down for the credit card because "computer says no", the lady that rang me could see why I am trying to do what I want to do and why it makes sound financial sense for me to do it..........

We faced the same issues earlier this year when we applied for a mortgage for a second house. We are both self employed so our earnings basic count for nothing so the amount of mortgage we could get would struggle buy a decent garden shed. We had sufficient savings to buy the house we wanted but that also counted for nothing................

Crazy, computer says no.

Rans6.......
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Old 2nd Oct 2021, 17:54
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I found to my cost recently that debit cards now have a transaction cost associated with them to be paid by the vendor. I went into my local friendly car dealer and tried to buy a car using my debit card. No can do was the dealer response, they, as business, would not let me buy a car outright with a debit card due to the commission applied. Last time I bought a car from them, for a similar amount, I paid the whole thing off in one hit on my debit card. Easy peasy.

Rans6.....................
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Old 2nd Oct 2021, 18:10
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Originally Posted by rans6andrew View Post
I found to my cost recently that debit cards now have a transaction cost associated with them to be paid by the vendor. I went into my local friendly car dealer and tried to buy a car using my debit card. No can do was the dealer response, they, as business, would not let me buy a car outright with a debit card due to the commission applied. Last time I bought a car from them, for a similar amount, I paid the whole thing off in one hit on my debit card. Easy peasy.

Rans6.....................
Must have been your dealer then because when I bought a replacement car in Sept, the dealer was only too happy to accept my debit card and the transaction was completed in seconds.

Long time since I used a credit card not having any need for one, but, I do recall one beginning with "B" suddenly dropped my credit limit and had a spate of doing so to customers who paid in full each month because they weren't generating enough interest charges. Happened to a mate at the same time. I recall this resulted in some less than complimentary publicity and, strangely, limits were returned to previous levels.
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Old 2nd Oct 2021, 20:19
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I have a personal credit card which has £2.50 credit on it ( one other available, but all paid off every month). This one I use extremely rarely , it is a get out of jail card, as it has a large limit, and I spoke to provider, and said if I use this I do not warrant a credit referral with the agent ! I have used it only once in 20 years to get a member of staff out of a situation, which was with a previous company where my company CC would have flagged an indiscretion ! They are now a senior partner with a well known Arch practice. Needless to say they reimbursed me.

Cheers
Mr Mac
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Old 2nd Oct 2021, 20:26
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Ever wondered where your money on deposit earning less than 0.05% (UK), goes overnight and beyond to settle/balance the banks central account, and they charge 25% on credit cards?
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Old 2nd Oct 2021, 21:21
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Originally Posted by krismiler View Post
They get the merchants for 2-5% of the transaction price. Tie ups and co branding with various companies bring in even more money.
.
I'm unsure if your figures are accurate for your area but doubt it. They sound like the percentages of 25-30 years ago. A friend ran a small restaurant in France and she paid 0.3%.
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Old 2nd Oct 2021, 23:39
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Years and years ago I had a store card which I rarely used, short of it I ran up a credit, they didn’t like the idea of owing me money at all and used to send me cheques until they cancelled it.
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Old 3rd Oct 2021, 00:38
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Commission figures vary widely, Amex and Diners Club are often refused by merchants due to their high rates. In some countries there is a surcharge applied to credit card payments. If I pay the body corporate charges on a property I own in Australia using a domestically issued VISA card I pay a 1.5% surcharge, with a MasterCard issued outside Australia it's 4.8%. Domestic debit cards are 0.4%.

Big companies will get a lower commission rate and those where the customer can't use an alternative, such as a government department, will get the lowest rates of all.

Marks and Spencer refused to accept credit cards until the year 2000, in 2003 they started issuing their own card.
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