Help for a credit newbie...low credit card limit?

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goodcreditplease
 
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Help for a credit newbie...low credit card limit?

Postby goodcreditplease » Sun Oct 18, 2009 10:49 pm

I had a cosigner credit card via my mother throughout college to teach me about cards. I paid in full every month. The original limit was $1000 & I never asked to increase it.

I graduated and applied for my own card via my bank (once I got my "adult" job) and my credit limit is now only $500. I'm a little outraged that it is so low.

-I have a job but I don't make much money ($15/hr)
-I live expense-free with my family (they have perfect credit, high-income)
-I have enough $$ in my bank account to buy a brand new car with cash (though the application didn't even ask if I had $$$)
-I have no debt
-I didn't have to borrow money for my car or my education (so I have no credit in terms of that)

I know I am new to credit, but I was a little taken back by the $500 limit. I mean, I couldn't even put rent on that if I were to move out.

I majored in Finance & I just want to have a decent credit score so when I buy a house/car/etc in the future, I can get a good rate. Being debt-free with money in the bank was not even considered it seemed--because I'm so new. :(

Suggestions? I'm thinking of calling and removing my mother from my old "cosigner" card so hopefully that will be good (or will that show as if I'm applying for a new card?)


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Cucumber
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Postby Cucumber » Tue Oct 20, 2009 9:50 pm

I know it sucks but a lot of it just has to do with the economy. Banks are so skittish right now on giving out credit they are giving crappy limits to loyal cardholders and almost nothing on new cards. I think you will be able to get that limit increased quickly after you have a few months of history on the account.

About your mom as a co-signer on the old account I don't think it will have any immediate impact but yeah it probably wouldn't hurt to take her off that account if you can.
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DoingHomework
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Postby DoingHomework » Wed Oct 21, 2009 2:12 pm

And you need to be patient. Give it 6 months. They will increase your limit very quickly if you pay promptly and otherwise use your credit wisely.

And you should not be putting rent on your card anyway!

goodcreditplease
 
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Postby goodcreditplease » Wed Oct 21, 2009 6:49 pm

Does it show on my report that I have a cosigner? I'll take her off.

What would be wrong with putting rent on the card? I did it in college. I paid it off every month.

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Postby AnthonyBarone » Wed Oct 21, 2009 8:56 pm

Here on the East Coast not many property management companies accept plastic for payment. I do a lot in construction for these people so I know a thing or two about how they work. I don't blame 'em either because the fees for cards would eat them alive. If you were doing that in school was it a college owned place?

DoingHomework
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Postby DoingHomework » Thu Oct 22, 2009 5:53 pm

goodcreditplease wrote:Does it show on my report that I have a cosigner? I'll take her off.

What would be wrong with putting rent on the card? I did it in college. I paid it off every month.


Perhaps nothing. But I just think it is a bad habit to get into paying for housing on credit. If you pay it off every month it is probably ok.

I have a second home we rent out as a vacation rental. We accept credit cards and the fees are very high. I can tell you that if we had regular renters paying by card we would be charging about 10% more.

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Cucumber
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Postby Cucumber » Fri Oct 30, 2009 4:20 am

DoingHomework wrote:I have a second home we rent out as a vacation rental. We accept credit cards and the fees are very high. I can tell you that if we had regular renters paying by card we would be charging about 10% more.


How much are the fees?

Another reason I know people hate taking plastic is because they want to not pay taxes on it. That's another reason why all those liquor stores give you a hard time for it because they hate paying income taxes.
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DoingHomework
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Postby DoingHomework » Mon Nov 02, 2009 1:42 pm

Cucumber wrote:How much are the fees?

Another reason I know people hate taking plastic is because they want to not pay taxes on it. That's another reason why all those liquor stores give you a hard time for it because they hate paying income taxes.


The fees depend on the card type. And aas a merchant you don't even know what you will be charged until later. And you cannot refuse to accept a card if it has the Visa or MC logo. They have an all ro none rule.

The charges are between 2.5% and 4% for consumer cards and about 1% more for business cards. Those gold and platinum cards especially screw teh merchant because they have high fees.

I don't think paying taxes has much to do with it. You pay taxes on cash sales just like credit card sales. Now, if you are talking about HIDING income, that is different. You would have to be a complete idiot as a business person to do that. You will almost certainly get caught and lose everything. It happens all the time.

Remember, those liquor stores have to buy their liquor. If they don't deduct the cost of the liquor then they are losing. If they do deduct it then the IRS is going to look at their margin, the difference between the revenue they say they collect and the cost of the goods sold. If it doesn't fit then the IRS simply charges them the extra in taxes and it is up to them to prove otherwise.

Perhaps you personally know someone who is cheating. All I can say is that they will get caught and will end up losing a lot more than they ever would have paid the IRS. That is plain stupid if you have a business.

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Postby Mogul of Pineapples » Mon Nov 02, 2009 10:26 pm

DoingHomework wrote:And you cannot refuse to accept a card if it has the Visa or MC logo. They have an all ro none rule.


That's how it should be but I run into businesses all the time that selectively refuse credit cards due to not a big enough purchase or some other reason. Also car dealerships get away all the time with having a maximum ceiling on purchases and that is not allowed yet I have never heard of any of them being reprimanded for it or changing their policies.

About the comments on taxes I agree businesses have to be stupid to do that but I also agree with cucumber that a lot of them try and pull it off nonetheless. Especially places like restaurants and dry cleaners where there's no inventory.
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DoingHomework
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Postby DoingHomework » Tue Nov 03, 2009 1:41 pm

Mogul of Pineapples wrote:That's how it should be but I run into businesses all the time that selectively refuse credit cards due to not a big enough purchase or some other reason. Also car dealerships get away all the time with having a maximum ceiling on purchases and that is not allowed yet I have never heard of any of them being reprimanded for it or changing their policies.

About the comments on taxes I agree businesses have to be stupid to do that but I also agree with cucumber that a lot of them try and pull it off nonetheless. Especially places like restaurants and dry cleaners where there's no inventory.


I see businesses with minimums, credit card fees, etc. all the time as well. They seem to get away with it. But since they are in violation of their agreement Visa or MC could come along any time and bill them for damages. It is part of your merchant agreement. But you are right, I have never heard of anyone actually getting charged.

As for taxes, restaurants are easy. A typical restaurant pays 1/3 of its revenue for food, 1/3 for labor and over head, and has 1/3 profit. Also, the IRS assumes that most restaurants take in 15% more than the computed bill in tips. If you run a restaurant and you show expenses too far out of these rules of thumb you are asking for an audit. You'll work so hard trying to make your books work that it is hardly worth it. And how much revenue does a restaurant take in? Look at the menu prices, look at the number of chairs...you'll get a fairly good idea if you factor in how busy etc.

I have talked with the woman who cuts my hair about it. She has a completely cash business. You'd think she could get away with a lot. But she has been audited 2-3 times in the last 10-15 years and has had to show random appointment books and stuff like that so they can estimate how much she makes. She is very honest about it but if she weren't it would be a lot of extra work to try to hide money from the IRS. They have gotten VERY good at catching people.

No doubt lots of people cheat on their taxes but it is not as easy as it seems if you have a business. Almost everything can be matched with what someone else claims now so you would almost have to conspire with others to save much. Personally my freedom is worth a lot to me.



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