News And Articles


Annual Fee
Interest Rate

How Credit Limit Is Determined

  • Interest Rate :
  • Annual Fee :

DESCRIPTIONS:


Ever wonder how your credit limit is determined by a bank? Have you ever felt bad about having a low credit limit compared to others? Do you sometimes wonder why you were given a very high credit limit? The “magic number” is dependent on a lot of things, but mainly at how the bank assesses your ability to pay back your credit.

Banks love good credit

Banks are ready to give you a higher credit limit if your credit score is good. There are some banks willing to instantly give you a big credit limit upon application but others may put you on probationary mode where you get low credit limit at first; the amount eventually increases over time when you prove to them that you are capable of paying your loan.

The bank is watching you

Banks and credit card companies in general like to monitor your credit status. While most of them can limit any increases on your credit to at least once or twice every year, you can also be rewarded with a higher number of increases if your credit is really good. Sometimes, having good credit is also unfortunate in a sense that you continue getting higher limits regardless of whether you are capable of affording to pay such an amount or not, so if you are not careful, you may find yourself buried in debt.

What to do to avoid debt

The truth is, credit card companies don’t care about your financial status. They just want to know if you are capable of paying your credit card bills on time. Therefore, you need to tell the bank or the credit card issuer to not give you higher credit limit anymore if you think you have enough. You need to know your own financial limitations first so you can set a boundary with your credit card.

To turn down an increase in your credit limit, a simple call to the bank or your credit card company should do the trick. You may have to send them a letter to ensure that they take action.



Featured Credit Cards:

RCBC Bankard MasterCard


FEATURES:

  • Do anything you want, anywhere you want in any currency you want and pay them when your back home
  • Gain cash with RCBC Bankard MasterCard because it allows you as much as 30% of your credit limit.
  • Keep your mind at ease with 24/7 customer service anywhere from 20 countries in the globe

BDO MASTERCARD SHOP MORE


FEATURES:

  • Pay just Php900 for the initial year!
  • Avail of a cash advance fee of 5% or Php300 whichever is higher
  • Have a finance charge of 3.50%
  • Avail of up to 30% Cash Advance of your credit limit!
  • Get rewards points each time you purchase items at SM by the Peso Payback Rewards Program
  • Get up to 5 supplementary cards on your first year!
  • Relish on exciting freebies and discounts through SM Exclusive programs and BDO Delights!
  • Avail of the ongoing installment promos for as low as 0% interest in different electronics ad appliance stores, furniture shops, health and beauty services, restaurants, jewelry shops, travel packages and more.

BDO Shop More MasterCard has wide recognition and acceptance on major establishments throughout the Philippines and plus 20 million locations in 275 territories and countries wherever MasterCard is accepted.

EASTWEST BANK PLATINUM MASTERCARD


FEATURES:

  • Get FREE LIFETIME MEMBERSHIP!
  • Delight in your ability to shop anywhere in more than 300 countries with almost 30 million establishments.
  • Finance charge of only 3.75% a month!
  • Cash advance of 5% or Php300 whichever is higher
  • Share your power to purchase to special people by requesting supplementary cards with the annual membership fees waived perpetually.

Featured Articles:

Should you let your kid have his own credit card?

Fact: there is already an increase of teens and college students who have their own credit cards. Credit card companies now aim on the two groups since they are the ones who spend more money than adults.

Educate your child on how to manage spending with a credit card. Parents an even use instances in the present state of affairs as an example to discuss to kids the pros and cons of credit cards.

Smaller credit limits are usual with these types of cards and while it may be easy to apply for one, credit card companies charge large interest rates and fees to the teenage credit card holders.

People who are below 18 are not legitimate in obtaining credit cards without the consent of their parents. Unfortunately, some kids fill out forms and receive credit cards without the knowledge of their parents. To avoid this, talk to them and help them realize the importance of beginning a solid credit history with their first card. Emphasize that it is of utmost importance to their future.

As a parent, start by reading the guidelines with your child. Make sure you call to attention all the terms written on the fine print. Avoid coming to the rescue if the bills get way out of control. This will teach him to be responsible in handling his money. A credit card spent by a teenager and paid by his parents initiates bad credit habits

Let the child bear in mind that his credit card sho uld be used in emergencies only. Monitor ALL his spending activities. Some credit cards even allow the parents to create their own credit limit for the supplementary cards. This is very logical especially if you are too busy with your career.

Parents can help their kids spend sensibly with the correct use of credit cards. At this early stage, it is better to prepare them in the reality of life by teaching them not to abuse its benefits.