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Making Smart Credit Choices: Requesting a Credit Limit Increase

People often get their first credit cards when they are young and have not quite established themselves financially. As such, it is easy to understand why so many people find themselves with lines of credit that have very low limits. It is not unusual for credit card companies to give new account holders lines of credit that are only for $1,000 or a little bit more. As people begin to progress a bit with their finances, though, they often need credit cards with higher credit limits. This can often prove to be a stalling point for some consumers, as they are not sure how to go about requesting a credit limit increase from their credit card companies.

Use Credit Responsibly

With so many financial experts suggesting that people avoid using credit cards, it may be difficult to understand why some people would want to increase their credit limits. If someone is responsible with their use of credit, though, it is very easy to wind up in a situation every month where they are utilizing a large percentage of their existing credit. Some people like to charge purchases, like gasoline, groceries and other common items, and then to pay off their credit card balance entirely when the payment comes through. If someone only has a $1,000 limit, and spends $500 on the card, they are regularly going to be at 50 percent credit utilization. That is something that can lead to a lower credit score. Suffice it to say, that everyone should use their credit responsibly and should make efforts to pay off their balances in full – or as close to that as possible – every month. Only then, should you seek to get an increased credit limit.

You’re Not Asking for a Favor

People often get intimidated when calling to talk to representatives from their credit card companies. They believe that if they say the wrong thing, they will get turned down flat, or that if they don’t mind their p’s and q’s that they will wind up getting slapped with a higher interest rate or something. Nothing could be further from the truth. You are the customer, and they are making money from supplying you with a line of credit. You never have to feel nervous about approaching a credit card company, be it to ask for a different payment date, to negotiate a lower interest rate or, in this case, to ask for a higher credit limit.

It’s Easier than you think

Most of the time, you will not even have to speak with anyone to get this done. All the major credit card companies have online portals that allow you to access your account. Typically, there is a link that you can access once you are signed in that will allow you to request a higher balance. Use this link. You will be taken to a form that asks you the reason for needing a higher credit limit. For example, the company may want to know if you are doing so to transfer another balance or to make a large purchase. Be honest, and fill out the form entirely. If you qualify, you will get a notification from the credit card company.

However, if you get turned down, you may want to call their customer service department directly. Speak to the representative professionally, and explain why you need a higher balance. If they turn you down, ask to speak to their manager or supervisor, then repeat your request. It may take a couple of calls, but if you persist, and have a valid reason for needing a higher credit limit (like the fact that you are making a lot more money now than you were when you got it, and want to avoid high credit utilization) you should be successful.

The Clock Runs out on Proposed Payday Lending Regulation in Nebraska

A new change to the payday loan regulations in Nebraska – a change that was endorsed in full by the Greater Omaha Chamber of Commerce, along with TD Ameritrade – has died out. This proposal would have changed the payday lending rules in big ways, but will not wind up taking effect any time soon. The bill – 1036 – was introduced by way of State Senator Kathy Campbell from Lincoln. It was designed to cap interest rates on payday loans at just 36 percent. This cap represented a major reduction from where the loan fees – when amortized for an entire year – currently stand.

In addition to APR caps, the bill was also aimed at changing the way debts are collected, while requiring more reporting to be done on the payday lending companies doing business in Nebraska. However, the payday lenders can breathe a sigh of relief, since the overhaul failed to get past the Nebraska Legislature’s Banking and Commerce Insurance Committee. This means that the 60 local payday lending locations in Omaha, and more than 90 throughout the state will operate per usual for the foreseeable future.

Senator Jim Scheer is from Norfolk and is the chair of the committee. He indicated that time was a real factor with regards to the folks supporting this bill. Those same folks met a roadblock when it came to a relatively shorter legislative session. The session this year is 60 days, while the following year will be 90. Session days alternate every year. If the senator does not name a particular bill as being a priority it will more than likely not make it out of the committee. The bill is then to be talked about on the full Legislature floor. Campbell did not indicate that the payday loans bill was a priority.

Sheer said, “It got past the point of being named a priority bill, and without that designation, it had no vehicle to get anywhere on the floor.  It didn’t make much sense from the committee’s standpoint to move it into the general file if it wasn’t going to go anywhere.”

When the 90 day legislative session rolls around there may be more time for discussions and amendments to the bill via negotiations submitted from both opponents and supporters. In a 60 day session, though, lobbyists and other interested parties do not have as much time to arbitrate and come up with solutions. This process proves disappointing to those who have a stake in the proposal.

The executive director of the Women’s Fund of Omaha Michelle Zych said, “Quite frankly, we were really surprised that it didn’t make it out of committee.” Zych’s group was the organization that originally pushed for the new regulations. Her supporters criticized the fees that are currently permitted on Nebraska payday loans. They believe that there are not many other states that will allow these higher rates, and that the fees currently contribute to consumers getting stuck in “debt traps.”

Opponents of the reform, like Brad Hill said that the industry is already sufficiently regulated and that borrowers are stopped from rolling over loans that they cannot afford to pay back in time. Hill then told the hard truth that many people don’t want to hear about: the fact that people who need small dollar loans do not have anywhere else to turn, other than to local payday lending locations or to online lending companies. Time is on the side of the payday lenders in Nebraska, for at least a little longer. Both opponents and proponents of the regulation will likely turn out in force when the time for the 90 day session arrives.