Balance Chasing – Is it Happening to You?

Credit card companies have changed the rules in the middle of the game recently by increasing fees and interest rates.  But, they have also begun another tactic that is equally as frustrating.  It is called chasing the balance down on your credit card account and it is happening to customers all over the country.

Why?  In an effort to reduce the amount of the balances of many customers, these creditors are using a technique known as chasing the balance.  The more you pay down your account balance, the more they continue to move the credit limit down.  This is causing some to go over their limits because they have not checked their balance recently and assume that everything is ok.  The problem arises when they go to pay a merchant and their card is rejected.  Others may find out when they log on to their accounts on the Internet.

If you are dependent on your credit card for cash advances to help you get through the month, then this could pose a serious problem for you.  The concept of using someone else’s money for a while works well for some consumers as they navigate their finances each month.  Those who use this technique do so as a result of unpredictable income from commissions or contracting positions which are erratic in pay.

What can you do about it?  Here are some things that you can do in order to deal with this reality:

Check your account regularly.  The best way to deal with this or other situation with your credit card is to make sure that you have Internet access to your account and check it regularly – probably every week for sure.  When you make a payment, be sure to check it every few days thereafter to see what happens.  You should be monitoring your account like a hawk these days any way because of changes to fees and interest rates as well.

Set up alerts.  If your credit card account has the feature which allows you to set up email alerts which notify you of changes in your account, then use this to your advantage.  You will get an email that tells you what the changes are and when they go into effect.

Call the card issuer.  If you find that you have had your limit lowered to just above your balance, then call the credit card company and see what it would take to get your limit raised again.  Reason with them about your dilemma and see if you get a sympathetic hearing.

Go somewhere else.  It might be time to take your account balance to another credit card company.  See if you can find a good balance transfer offer and move your balance.

Over the limit.  Make sure you watch for over-limit fees that are charged to your account as a result of the card issuer’s action.  If they move your limit to below your balance, then the triggering of a fee for being over-limit would fall on their action, not yours.  You should be able to at least get them to move the credit limit back up to at or just above your balance.  If they do this, then it will really be time to take your business elsewhere.

This is not a pretty situation, so you need to be vigilant in order to guard your credit and make changes that benefit you in the long run.

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This entry was posted on Thursday, April 16th, 2009 at 9:11 am and is filed under Debt & Consolidation, Tips & Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.