Credit Cards

Miscellaneous and Personal Stuff I Must Share
1

First I have to tell you that I have a total of 9 credit cards, if I maxed them all out I would owe £71,250.00.As it is all I owe overall is just over £100.00

Why so many cards you may ask

Well I was left a bit of money, then an insurance company paid up for an accident I had in 2004 and before you knew it I was inundated with pre-approved offers from CC companies. How did they know I had this money? This is something I can’t fathom out

Being a tad childish I applied for them all and I got them, activated them, used them just once and then paid them off. At the moment I use just Capital One as I find their interests rates to be the best. They also do not charge a late fee should I happen to miss a payment date. I confess to having insisted on this when I took the card and to my surprise they agreed. Other CC companies did not.

I have a number of questions:

  1. 3 of my cards although bearing different names belong to one holding company, namely Barclays Bank. Do they not check to see if you already have a card from them?

  2. Two of my cards are from the same company, MBNA. One card gives me a credit limit of £3,500 the other £4,500. Again do they not check to see if I already have a card before issuing another to the same person?

  3. Why do I keep getting a credit limit increase when I’m not using the card, this applies to most if not all the cards.

  4. Why do I keep getting pre-approved loan offers of amounts ranging from £40,000 to £100,000

  5. Lastly, I am not a young man. Suppose I was to max all cards out and then snuff it would anyone be responsible for the debt?

2

I have a Capital One card and get offers for a new card from them all the time. I often wonder the same thing.

I get this from CapOne too.

I can’t speak for the UK, but in the US, your estate would be responsible. If there was an authorized co-signer, then that person could well be responsible as well.

Zev Steinhardt

3

So far as I can tell, debts you owe when you die become debts of your estate. Some may be covered by provision of life (i.e. death) insurance policies.

4

I know you didn’t ask for advice, but having that much open credit available can hurt you when you apply for a car loan, mortgage, etc. Even if you have no balance, they see how much you would be able to charge and that actually lowers your credit score.

I would seriously consider keeping 2 or 3 cards (at most) and closing the other accounts. Don’t just cut up the card, but contact the issuer and ask for your account to be closed, or it won’t register on your credit report.

5

I can tell you one thing about MBNA: when I arrived in Ireland and had no credit rating, and had been turned down for several CCs from banks already, I applied with MBNA just for the hell of it, and to my surprise was issued with a card. When it arrived it had my surname spelled wrong. I am almost certain this is the only reason I got it.

I used it and paid it off over the course of a year, then got the name changed to my correct surname, and my credit became good. Bizarre is what I call it.

6

Oh, and by “bizarre” I mean “grasping and incompetent”.

7

Actually, this isn’t true. What is true is that more credit is easily granted to people who already have good credit histories and significant amounts of available credit. chowder’s utilization history and his debt-to-income ratio are much more important that just the sum total of his available credit.

You are welcome to think I’m full of it, but then I’d invite you to visit the forums at CreditBoards to discover otherwise. There are folks over there who discuss strategies for increasing their available credit all the time; many of the more successful ones report excellent credit histories (which sort of goes without saying) and total available credit as much as 6x their annual income, topping out over $250K. I personally think that’s getting a little crazy, but the fact that they are able to do it, while still carrying mortgages, car loans, etc., is enough evidence for me that your statement doesn’t hold water.

On a much smaller scale, I can see it as true for myself. I went through a really bad time financially some years back, totally tanked my credit. After a couple of years of slow and steady recovery (via paying down my debts), I was offered a couple of subprime credit cards. They were better than nothing, so I took them, and used them responsibly. I now have several prime credit cards in addition to the old ones, and I find that my creditors are doing the “match-her-other-card’s-limit” dance without my even asking, because they all want me to use their cards.

As to why a bank will issue more than one card: if you have good credit, a creditor won’t think too hard about it, because you’re a good risk. Also, are the terms of the cards exactly the same? Same benefits/rewards? Probably not.

Though most banks would still not issue more than thee cards to one person, Capital One is something of an exception. They actually have a policy of continuing to issue low-limit cards to people as the credit lines are used up, in part because it guarantees that the person’s credit score will stay lower (high utilization, in excess of 50%, really tanks your score) and so that person will remain attractive only to the subprime lending market. Nice and slimey, eh?

The world of credit is not one where “common sense” arguments operate. There is nothing wrong with having lots of credit available to you, as long as you use it responsibly. That is always the bottom line.

8

So before any of the people named in my will all my debts would have to be paid before they saw any benefit from my estate. This I understand and knew.

But a CC debt AFAIA does not constitute a “real” debt unless there is a co-signatory to the CC. I may be wrong here but that’s how I understand it to be.

I suppose I should have said that I have payment protection cover on all the cards.

So my question again is: If I maxed them all out would this PPC cover the total owed should I pop my clogs

9

I guess that depends on the terms of your PPC. I know little about the details of this; I suspect that “you’re fully covered no matter what” is one, but not the only, possibility.