I recently receive a notice from my credit card company that my credit limit had been increased because I’d been a “good customer.” I didn’t request the increase but it’s not uncommon for card issuers to increase limits for customers who pay their bills on time or have low balances. Generally, the better your credit, the more likely you’ll be offered an increase on a credit card.
However, for many people an increased credit limit is simply a temptation to spend more money. They may be better off declining the increased limit to avoid running up too much debt. It only takes a phone call to the credit card company to ask that the limit not be increased. Another reason to decline a limit increase is that other creditors may look at that increase as a sign that an individual has too many lines of credit open. If another creditor gets nervous that a customer won’t be able to make payments on their card, they may decide to lower the limit on that card.
Carefully weigh any limit increases offered and don’t be dazzled by big numbers. Each individual must look at their own situation to decide whether they can really handle having access to a large amount of credit.
About the Author
Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.
At the end of September, former customers of Express Consolidation Settlement will need to determine if they want to cancel out of their debt management program or have their account transferred to another agency authorized in their state. In December of 2006, the FTC filed a complaint against Express Consolidation Settlement which has now been settled.
In October of 2007, the FTC sued Edge Solutions which ultimately led to its recent closure.
Consumers looking for an alternative to Bankruptcy, often explore debt settlement as an option.
In most cases, if you decide to move forward with debt settlement, you will be asked to stop paying your creditors and to put those funds into a settlement account each month. The settlement account will grow each month until it reaches a point that the debt settlement company feels is sufficient to negotiate the settlement. The amount you owe, the amount you are able to save each month, and what the creditors are willing to accept will dictate how long this process takes.
So, what happens if the debt settlement company you are working with closes during the process?
If a government agency took action against the settlement company, in many cases you will be given the option to cancel out of the program or have your account transferred to another organization. If you discover that the company you are working with is simply going out of business, it is important to do the following:
- Contact your bank to cancel any automatic payments being made to the company.
- Contact the company to determine how to obtain a refund of the money paid into the settlement account. You should also seek a refund of any fees you have paid.
- Contact an Attorney, if appropriate, when having difficulty recovering money already paid.
Once you’ve protected yourself from giving the company any additional money and are looking into ways to obtain a refund of monies paid, you must still determine how to best handle your debt situation. If you are confident debt settlement is the right path for you, you need to choose whether to hire another firm or to attempt to negotiate your debts on your own.
When evaluating any solution to your debt problems, you must understand the consequences of that option not working. Whether the company you choose is ineffective or goes out of business, you must weigh those potential risks when deciding how to best move forward.
About the Author:
Chris Rocks is the Founder and Executive Director of the Credit Advisory Alliance (CAA), a membership based organization helping those who have suffered a financial crisis restore their credit and reinsert themselves back into the credit-driven economy. Prior to founding CAA, Chris had successfully helped consumers achieve their financial goals as both a Financial Advisor and the Vice President of a Mortgage Origination Firm.