It never fails that just about the time when my 0% APR introductory offer is about to end on my credit card, I get a sudden increase in my credit line, setting me up to make a large purchase just a month or two before my interest rates increase.
This is just another example of Credit Card Tricks that the credit card companies use to take advantage of their customers.
Of course, there’s nothing wrong with credit line increases, but why not offer customers the full credit line that their credit history would qualify them for during the extent of the 0% APR offer on purchases or balance transfers.
Over the last year, I’ve taken advantage of 3 different Balance Transfer Credit Cards to avoid paying interest on my credit card debt.
However, if I had initially received the full credit line that the credit card issuers were willing to allow me near the end of the 0% APR offer, I would have only had to use 1 card in the first place.
Now that my 0% introductory rates are about to expire within the next month or two, I’ve received credit line increases on all 3 credit cards.
These are not just the usual increases that customers may receive over time, but they are huge credit line increases of 200% to 300% over my original credit lines, which otherwise have not changed until now.
My credit score has remained virtually the same over this time, so it’s obvious that my original credit line was not based solely on my credit score.
The only significant change has been the amount of my current credit debt, which has been reduced over the last year, although not as significantly as my credit lines have increased.
Also, none of my other credit cards have increased my credit lines due to slight improvements in my credit score, but the 0% APR Intro Offers have long expired on my other cards.
The only possible explanation for this is that the credit card issuers hope I will receive a huge increase, get excited about my new spending power, and go out and spend a lot of money on my credit cards.
Then, when my interest rates increase in about a month or so, they can collect interest from me and make a profit.
I guess I can’t blame them, as they’re in it for the profit and increasing customer credit limits isn’t necessarily a bad thing, but it’s important to view things as they really are and not fall into the traps.
This is not about companies rewarding their good customers with credit line increases, but instead it’s about companies trying to set up their customers to pay high interest rates that they probably can’t afford.
If I was to actually spend up to my limit on these 3 cards, I could never afford more than the minimum payments, and it would take years for me to pay it off, costing thousands of dollars in interest charges.
So why would a credit card company set me up to fail?
Simply put, good credit card customers mean less profits.
Credit Card companies make most of their money off interest charges and the fees they charge when their customers make late payments or exceed their credit limits.
So if they can somehow trap me into spending more money than I can realistically afford, that means they’ll probably be able to collect interest from me for a long time, and if they’re really lucky, I might even miss a few payments and get stuck with late charges.
In the end, I’m glad to be given credit line increases, because you never know when you’ll need to max-out all of your credit cards, but I know I could never really spend that amount if I want to keep myself in the credit game.
I can only hope to understand the rules of the game, and then play it to the best of my ability.
Thanks and enjoy maximizing your credit.