Size Matters, Or How to Get Your Credit Limit Increased

As you rebuild credit or work to lift you score into the higher levels of the credit score range, having higher limits on your revolving (mostly credit card) accounts makes a difference.  Here is a technique that can be effective in getting your credit card company to raise your credit limit.

Use your credit card to purchase two or three or more times the available limit each month.  Remember, the credit card company makes a fee on each transaction.  So the more you charge the more they make in fees from the merchants.  If they are making a lot more fees than your limit would indicate they should expect, they are going to be motivated to raise your limit to increase their fee income.  And the most likely way that is going to happen is if they give you more credit to generate fees with.

But HOW can you do this?

The answer is to make multiple payments on your card each month.  To illustrate, here is a story we were told from one of our credit repair clients.  When we started working on his credit, his score was too low to qualify for a very high limit.  He was issued a Walmart credit card with a $200.00 limit.  Each week, he went to do the family grocery shopping, which normal cost about $150.00.  At the check-out register, he paid with the Walmart credit card.  He then wheeled to cart over to the Service Desk, and made a credit card payment that was almost exactly the same as the charge he’d just put on the card.  He did this each week in the month.

Do the math.  Charging $150 per week for 4 weeks is $600 of charges per month – and that’s what shows up on the monthly credit card statement.  The statement also shows the $600 of payments.  The credit card company is earning fees on a per cent of the $600 and this is on a card with a $200 maximum limit.  How long do you think this will go on before the credit card company decides it might get even more fees if it raised the limit on this account?  The answer was three months.

You don’t need a service desk in the store to make this work.  Go on-line and make a payment on your credit card with your ATM card and the same thing happens.  Just discipline your self to do it.  Schedule a time each day to review your accounts and make payments.

Banks to Shift From `Extend and Pretend’ in Real Estate Loans, Survey SaysBanks to Shift From `Extend and Pretend’ in Real Estate Loans, Survey Says

Lenders will shift toward amending mortgages next year instead of extending maturities, leading to increased sales of distressed real estate, according to a survey of almost 900 property professionals.

More than 63 percent of those surveyed said they expect maturing loans to be modified, while 7.1 percent said loans will continue without changes to defer losses, a practice known as “extend and pretend.” About 16 percent of respondents said real estate with maturing loans will be foreclosed on and put on the market, and almost 14 percent said properties will be sold by borrowers, PricewaterhouseCoopers LLP said in a report today.

“‘Extend and pretend’ was the sound bite from a year ago,” Mitch Roschelle, co-chairman of the annual “Emerging Trends in Real Estate” survey, said in a telephone interview. “Now it’s ‘extend and amend.’ There’s less pretending and more focusing on the reality.”

Commercial real estate executives have lowered their return expectations as they enter “an era of less,” according to the 74-page report. Stagnant wages and high unemployment have led landlords and their lenders to focus on current yield rather than expecting prices to rise, PricewaterhouseCoopers said.

“The metric that the real estate world is most sensitive to is job creation,” Roschelle said. Rising employment spurs demand for office space for workers, apartments and houses for them to live in, stores where they can shop and warehouses used by retailers, he said. “So one job creates all these different uses of real estate.”

‘Core’ Property Yields

Investors are seeking returns of 6 percent to 7 percent from well-leased “core” properties, meaning the highest- quality buildings in the best locations, according to the survey.

For higher-risk investments, they’re expecting returns within two or three percentage points of 15 percent. That’s down from the more than 20 percent returns they sought before lenders withdrew from the market after the 2008 credit crash caused more than $1.8 trillion of financial losses and asset writedowns worldwide.

Investor confidence is rising, with 56 percent expecting at least “modestly good” profits in 2011, according to the survey. That’s up from the 35 percent who are expecting modest or better profitability this year.

“In the past, every transaction was bigger than the last transaction, and we were constantly raising the bar,” said Roschelle, who conducted about 10 percent of the survey’s 275 face-to-face interviews. “Now our survey respondents are telling us nothing’s going to be as big as it was in the past. We’re not going to see blockbuster transactions that grab the headlines.”

The survey is a joint venture with the Urban Land Institute, a Washington-based organization of real estate investors and developers, architects, engineers and academics. The report is being released today at an institute conference in Washington.

To contact the reporter on this story: David M. Levitt in New York at dlevitt@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel in New York at kwetzel@bloomberg.net

Hello world!

We hope to bring you good resources and links to help you better manage your money, and your credit. In the world we live in today we have thousands of people who can’t get credit to buy the things the want and need. Sometimes this is due to circumstances beyond their control. So we hope to help educate people and keep you up to date on the latest news that efforts your credit.