| Once solely restricted to the wealthy, now almost any | | | | personal savings or credit insurance will negatively |
| one can obtain a credit card including the most | | | | affect your credit score instantly. Secondly, future |
| favored, first year college students. It's no wonder then | | | | creditors also consider your debt to income ratio when |
| that U.S. consumer credit card debt stood at over | | | | deciding whether to extend additional credit to you. |
| $735 billion in 2003 which further breaks down to | | | | Ideally you want this to be as low as possible |
| approximately $12,000 per household for those who | | | | considering you never know when you might need |
| elected to carry balances from month to month. While | | | | additional credit. A debt to income ratio of 36% or less |
| the advertisements of the Visas and MasterCards of | | | | is most favorable.So what is the ideal balance for |
| the world continue to tout the convenience and ease | | | | someone with a credit limit of $3,000? Ideally, potential |
| at which you can shop or handle an emergency with | | | | creditors only like to see 25% of your total available |
| just a swipe of the plastic, they fail to mention how | | | | credit outstanding at any given time. So, with a $3,000 |
| you as a consumer should use your card including | | | | limit you should only carry a balance of approximately |
| guidelines as to how much credit limit is too much and | | | | $750. I'm not saying you can't purchase more than |
| how to keep from ruining your credit rating by | | | | $750 worth of items at any one time, what I am |
| constantly maxing out your credit card. The purpose | | | | saying is that if you must make major purchases you |
| of this article is to provide you with some insight in | | | | should commit to paying significant amounts of money |
| these two areas.When you apply for a credit card, | | | | each month to bring your balance back down to this |
| one of the first things you consider is the credit limit. | | | | more reasonable level before charging again.Credit |
| Why? Because that determines how much you can | | | | cards, when used wisely, can be one of the most |
| spend, and the rule of thumb is the higher the limit the | | | | efficient and empowering tools in your wallet. They |
| better. But wait a minute, just because your limit is | | | | give you the opportunity to take advantage of deals |
| $3,000 doesn't mean that you should keep spending | | | | and discounts at the drop of a dime whether you have |
| until it's gone. Why? There are two simple reasons | | | | the money or not. Not over looking all of these |
| why you should not spend until your card has reached | | | | wonderful advantages, we should really think about |
| the limit. The first reason being that the higher your | | | | how we use these plastic jewels keeping in mind that |
| outstanding balance the higher your minimum monthly | | | | it never looks favorable to future creditors to view a |
| payment. Once your card reaches the limit unless you | | | | credit report of an individual whose accounts are at or |
| start to pay a significantly higher monthly payment to | | | | near max. In fact 25% of the approved credit limit is |
| get it down, the interest charges and over-the-limit | | | | generally the rule of thumb for the outstanding balance |
| fees will begin to kick in which will cause someone | | | | that you carry forward from month to month. By |
| who is living beyond their means to become | | | | keeping this in mind as you go about your day-to-day |
| overwhelmed very quickly. Even worse if you have | | | | purchases, you can ensure that you do not negatively |
| more than one card that is at the limit, you are playing | | | | impact your credit score or prevent your self from |
| a dangerous game because any major disruption in | | | | being able to obtain new credit.This article has been |
| employment or income that you can't supplement with | | | | provided courtesy of Creditor Web. |