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What is your limit?


In the Philippines (and in most economies), there are no hard and fast rules on determining the credit limit an issuing bank may extend a cardholder. It’s all arbitrary; the figure often seems to come out of thin air, based solely on the bank’s discretion. However, some factors do affect how big (or small) your credit limit can be.

  1. Your monthly income – Some banks give you a limit that is 20% higher than your monthly income, and some banks give you 20% less than your monthly income.
  2. How long you have been a creditor – If you have been a credit card holder if that bank for a few years, you may be given a bigger limit than a new applicant.
  3. The issuing bank’s conservativeness – Citibank and Banco de Oro are often less conservative than most issuing banks; they tend to give higher credit limits.  Some of their cards, of course, impose higher interest rates than the cards issued by more conservative banks, like BPI.
  4. The credit limit on your other cards – If you have credit cards from other issuers, a new issuer might try to give you at least the same credit limit, if not higher, provided that you’ve been responsible in using your current limit. If you pay on time and regularly, other banks will feel more confident in lending you bigger amounts.
  5. Your desired credit limit – You can oftentimes demand your credit limit, especially if you have a good credit score, meaning, you have a history of being a responsible credit card user. Getting a higher credit limit can be as simple as calling your bank and asking for an increase. They may require you to fax an income tax return or other proof of income. You can also negotiate the limit on new banks trying to get your business by demanding for a certain figure and saying that you will not sign up unless they grant you that figure. If you really are an ideal credit candidate in their eyes, you will get the limit you want.



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HOW TO PICK THE BEST AMONG THE REST: CHOOSING THE RIGHT CREDIT CARD FOR YOU

With all the offers you get form credit card companies, you may feel a little overwhelmed about what kind of credit card suits you best. Here, at comparecreditcards.com, have a few tips for you in choosing the appropriate credit card for you before you say the big “yes” to any credit card company or get carried away with solicitations over the phone or via mail.

Find out your basic goals. Ask yourself; Why do I need a credit card? You can’t just go and apply for a credit card just to be “in” with another crowd.

Next, determine how much you are prepared to pay for the annual fees and how much you plan to spend every month. This will help you start selecting a credit card that is within your budget.

Now do the research. Go to online resources (like comparecreditcards.com) to find out everything you need. If you have free time, drop by at the banks to inquire personally about all the things you need to find out. These should include the following:

  • The annual fee
  • Required minimum period
  • Finance charges
  • The credit card issuer providing the credit line and its size
  • The extension period (interest free days) before the payment should be made.

Review all the credit cards your have researched. Base your choice of credit card to the one that bests suits your lifestyle and personality. Always remember to choose the credit card that proposes the BEST DEAL for you. For example, don’t go for a credit that offers you free miles if you don’t have any plans of traveling abroad! Get the point?

Now that you know what to do, start looking up your resources and find out the best credit card suited for you.