Personal Finance

Credit limit increase and or lower interest rates

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  • Jul 21st, 2015 5:03 am
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[OP]
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Jun 29, 2012
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Vancouver

Credit limit increase and or lower interest rates

In the last couple of weeks I have received a plethora of notices that my interest rates have been lowered or my credit increased. Scarey. For someone who already is in financial trouble this could really hinder them.


Has everyone else been receiving these offers?


I guess for me it does not really matter. I already have more credit than I truly need and I pay off each balance every month. I'm too cheap to pay interest.
13 replies
Sr. Member
Mar 3, 2015
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Scarborough, ON
i like your honest, just ignore those offers and keep on keeping clean credit standing.
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Jan 2, 2015
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Toronto, ON
TheDogAteMyName wrote: In the last couple of weeks I have received a plethora of notices that my interest rates have been lowered or my credit increased. Scarey. For someone who already is in financial trouble this could really hinder them.
Aren't those good things? If you were in trouble and your interest rates were decreased, you could more easily pay off your credit. Plus a higher increase would result in a higher credit rating. Or did you mean the opposite? That would be worrisome.
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Oct 4, 2004
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FoFai2015 wrote: Aren't those good things? If you were in trouble and your interest rates were decreased, you could more easily pay off your credit. Plus a higher increase would result in a higher credit rating. Or did you mean the opposite? That would be worrisome.
Yes and no. A lower interest rate gives consumers more borrowing power and gives incentive for them to put that money back into the economy versus saving it- a "good and "bad" thing. Those with debt and the means to pay it off and are doing so slowly, yes, it's a good thing because it means your LoC and mortgages are all going to be cheaper. A lower interest rate also spurs the real estate market and auto market as people buy things that should be beyond their means because their monthly payments are lower than ever- and if it's a variable mortgage, I think sometime during your amortization period, rates will go up and I hope everyone can still afford payments then.
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Feb 23, 2004
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Which bank
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Deal Expert
Aug 22, 2011
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If you are referring to a credit card, who gives a crap about interests rate...you should not be carrying a balance!
Deal Addict
Jan 27, 2015
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Edmonton, AB
TheDogAteMyName wrote: In the last couple of weeks I have received a plethora of notices that my interest rates have been lowered or my credit increased. Scarey. For someone who already is in financial trouble this could really hinder them.


Has everyone else been receiving these offers?


I guess for me it does not really matter. I already have more credit than I truly need and I pay off each balance every month. I'm too cheap to pay interest.
Same here. My brother-in-law is in a management position at one of the major banks, and he says that the banks always do a soft check on their customers who have loans outstanding to see which of the customers have outstanding credit. If they do, they are automatically "pre-approved" for even more borrowing.

Reason: the banks are cutting down hard on lending money to sub-prime borrowers. However, they still need to make money so they are now targeting those with excellent credit rating.

So the people who need credit are getting rejected yet the people who do not need it are getting pre-approved. Go Figure.
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Aug 22, 2011
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FinancialFreedom wrote: Same here. My brother-in-law is in a management position at one of the major banks, and he says that the banks always do a soft check on their customers who have loans outstanding to see which of the customers have outstanding credit. If they do, they are automatically "pre-approved" for even more borrowing.

Reason: the banks are cutting down hard on lending money to sub-prime borrowers. However, they still need to make money so they are now targeting those with excellent credit rating.

So the people who need credit are getting rejected yet the people who do not need it are getting pre-approved. Go Figure.
Makes sense to me.
How much are the banks recouping from those drowning in debt, before it goes to collection?
Give it to those that are not delinquent, don't carry a balance, but make large purchases; which is still pretty profitable based on merchant fees alone.
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Jan 27, 2015
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Edmonton, AB
vkizzle wrote: Makes sense to me.
How much are the banks recouping from those drowning in debt, before it goes to collection?
Give it to those that are not delinquent, don't carry a balance, but make large purchases; which is still pretty profitable based on merchant fees alone.
Indeed.

However, the folks that don't need credit are not diving in droves and extending themselves amidst this technical recession. I wonder how the banks will perform over the next year and a bit. Along with the looming federal election in October, I've got my popcorn out and going to enjoy what will transpire over the next 15 months!
[OP]
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Jun 29, 2012
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Vancouver
FoFai2015 wrote: Aren't those good things? If you were in trouble and your interest rates were decreased, you could more easily pay off your credit. Plus a higher increase would result in a higher credit rating. Or did you mean the opposite? That would be worrisome.
I'm thinking of someone in particular. If her limit goes up and her interest goes down she will charge more thinking that carrying a balance won't be as bad as it is lower. I just think that with all these new offers people are going to start carrying even more credit card debt.
[OP]
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Jun 29, 2012
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Vancouver
vkizzle wrote: If you are referring to a credit card, who gives a crap about interests rate...you should not be carrying a balance!
Well sure in a perfect world but hell even millionaires get caught up in credit card debt and then declare bankruptcy. So I care.
[OP]
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Jun 29, 2012
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Vancouver
kocoman wrote: Which bank
I've received offers from PCF, Canadian Tire, CIBC and Scotia Bank. From 0% balance offers, increased limits and lowered interest rates.
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Aug 22, 2011
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TheDogAteMyName wrote: Well sure in a perfect world but hell even millionaires get caught up in credit card debt and then declare bankruptcy. So I care.
Well then that's your problem if you want to use a high interest card and carry a balance.

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