Comments on: Too Much of a Good Thing

By: bigasssuperstar

bigasssuperstar — Sat, 31 May 2008 19:13:57 +0000

I’ve written a blog post about this, spawned, I assume, by reading this article a few weeks ago ..

.. so now I’m wondering — does anyone have advice on how low to drop those credit limits? I’m sure the answer starts with “well, that depends…”

By: Stephan

Stephan — Sat, 10 May 2008 07:13:10 +0000

I have to disagree with you, when I applied for a mortgage no lender was interested in my available credit, none used “hypothetical maxed out cards” in their calculations for my TDSR/GDSR. They were much more interested in the fact that I had a really good credit score, paid my car off early, and paid all credit cards in full, on time, every month.

I wonder if using available credit in calculating ratios is something lenders do when they are looking for a reason to turn down a customer they don’t really want, and something they are willing to overlook when it suits them.

By: Melaniesd

Melaniesd — Sun, 04 May 2008 00:23:40 +0000

Gail, THANK YOU!!! You did a fantastic job explaining how TDSR works. I’ll be forwarding your blog to my co-workers. It’s a good way to explain it to our clients.

Dan, I’m sorry no one told you how balance transfers worked. They CAN be a fantastic tool to help you lower your interest and pay off your debt faster - but the key is to do it on a card that has zero balance and don’t charge anything else until the balance transfer is paid in full. I’m always careful to explain that to my clients because I think they need to be aware of how it works. It does explain it on the back of credit card statements - but who reads them right?

Tracy: I do believe you’re fine with how you use your *little* credit card. As long as the balance is low it should help your credit score. Paying it in full each month is the best way to go.

By: Tracy J

Tracy J — Sat, 03 May 2008 19:37:03 +0000

One more thing… I have a “little” credit card that I have had for over a decade… it is used lightly and paid off every month. Is that the credit usage that will keep my credit score healthy? I cancelled my “extra” Master card recently… I never used it, it had no benefits and a huge interest rate… up until I started watching your show regularly I never thought about it much. After all, if it was at zero balance, what harm could it do, right? LOL

By: Tracy J

Tracy J — Sat, 03 May 2008 19:30:19 +0000

GACK! I have one of those “platinum” cards!!!! I got it a few years ago because of the cheap interest introductory rate, and it really was valuable for that since I got a few higher interest loans paid off very quickly and cheaply. Now, although it never has a balance, I am frightened of what that AVAILABLE balance means to any potential loan opportunities.
I guess I need to call them to lower my limit.

By: Dan

Dan — Sat, 03 May 2008 19:04:35 +0000

This comment is kind of on topic, about how credit card companies never give you to much of a good thing.

I recently had done a balance transfer of 2500 to a 2.9% promotional rate for 6 months. I thought it was a great way to save some interest.

The card is the one I use just to purchased gas because I save 2 cents a liter and only need to pay for gas once a month.

The problem came when I started to purchase gas. Every month I purchase and pay off about 220 in gas. When I made that payment of 220 it went to the balance transfer and then the 220 worth of gas was then being charged 18.9% until the transfer was paid for.

I am glade this came to my attention by the second months because if I didn’t notice, by the end of the 6th month I would have been paying full credit card interest on half of my balance transfer.

It will now be staying safely on my line of credit until it is paid for!