Page 25 - ARUBA TODAY

BUSINESS Wednesday 26 september 2018
A25

How to live with your first credit card's limit

By CLAIRE TSOSIE missing payments - espe-
Associated Press cially if your balance is near
The thrill of getting ap- your limit," Siddiqi says.
proved for your first credit KEEP YOUR BALANCES LOW
card might wear off — at For some, getting a low limit
least a little — when you is a rude surprise, like finding
see the news punctuating out you got a C on a test
that congratulatory mes- you thought you aced. For
sage: Your new credit limit others, it's expected. Say,
is lower than you expected. for example, you applied
So the mental math begins. for a secured credit card,
Can you shop for groceries or a card backed by a se-
for a full month without fly- curity deposit. With such
ing too close to your limit of, cards, your limit is typically
say, $500? Is it even possible equal to the deposit. If you
to pay for a plane ticket? If put down a $200 deposit,
the answer is a resounding for example, you would get
"no," it's time to hash out a a $200 limit. No matter how
new game plan. you got a low credit limit,
Instead of trying to use your it's now up to you to man-
credit card for everyday age it. In part, that means
purchases, focus on estab- keeping your balances
lishing a history of on-time This June 10, 2015, file photo shows chip credit cards in Philadelphia. Instead of trying to use your low. Using too much of your
payments and responsible credit card for everyday purchases, focus on establishing a history of on-time payments and re- available credit — which is
borrowing. The positive his- sponsible borrowing. easy to do with a low limit
tory you build now could Associated Press — can drive up your credit
pay off in the years ahead. utilization ratio, or the per-
PAY ON TIME AND IN FULL scoring and the director chances of getting an au- Missing payments or paying centage of available cred-
As a first-time credit card of credit scoring and deci- tomatic limit increase later only the minimum, mean- it you're using, and sink your
applicant, your credit his- sioning at SAS, a company on. Banks typically reevalu- while, could thwart your credit scores in a hurry.
tory up until now might be that provides major banks ate your account every progress toward establish- To keep your scores
a whole lot of nothing. So with analytics software for nine to 12 months, looking ing a positive credit history healthy, a rule of thumb is
it's not surprising that issuers making credit decisions. at factors such as scores, — and cause you to rack to use no more than 30%
might start you out with a The remedy: Use your cred- payments, the percentage up interest charges and of your credit card's limit at
low limit. Banks are "just be- it card to build a positive of available credit you're penalty fees. all times. On a card with a
ing careful because they credit history by making it a using and how long you've "Typically, banks would be $200 limit, for example, that
don't know who you are," priority to pay every credit been a customer, and may hesitant to give you a limit would mean keeping your
says Naeem Siddiqi, an card bill on time and in full. increase your limit at that increase if all you're doing balance below $60. The
author of books on credit That could improve your point, Siddiqi says. is paying the minimum and less of your limit you use, the
better. Here's how you can
keep your balance low:
US consumer confidence rises to 18-year high in September - Make multiple payments
each month. Your credit
By PAUL WISEMAN should be welcome news utilization ratio is based on
Associated Press for retailers as they begin what your balances are
WASHINGTON (AP) — U.S. gearing up for the holiday when your issuer reports
consumer confidence shot season," said Lynn Franco, them to the credit bureaus
up to an 18-year high in the Conference Board's di- each month.q
September — good news rector of economic indica-
for retailers as the holi- tors.
day shopping season ap- The U.S. economy grew
proaches. at an annual pace of 4.2
The Conference Board, a percent from April through
business research organi- July, the fastest rate in In this Aug. 30, 2018, photo, a lot technician passes by a long
zation, said Tuesday that nearly four years. And the line of unsold 2018 and 2019 Countryman models at a Mini deal-
its consumer confidence unemployment is 3.9 per- ership in Highlands Ranch, Colo. Associated Press
index climbed to 138.4 in cent, near a 50-year low.
September from 134.7 in The strong job market im-
August. This month's read- pressed Americans re-
ing was the highest since sponding to the Confer-
September 2000. ence Board survey: 45.7
The index measures con- percent said jobs were
sumers' assessment of cur- "plentiful" — most since
rent economic conditions January 2001.
and their outlook for the "Knowing that the job mar-
next six months. Both im- ket is strong, knowing that
proved in September. one has a regular pay-
"These historically high con- check, does wonders for
fidence levels should con- confidence," said Jennifer
tinue to support healthy Lee, senior economist at
consumer spending, and BMO Capital Markets.q