Question : How does a credit limit work, I just got my first credit card?
I just got my first credit card and it has a $2,500 limit on it. I have charged $2,225 on it. I will only be able to pay the minimum payment this bill cycle of $50. Though I should be able to pay it off in full by late September. In the mean time I need to pay some bills. Will I get a $2,500 credit limit the following cycle or just the remaining $275 until I pay the bill?
- asked by life
All Answers:
Answer #1
The credit limit is the highest balance you canhave on the card at any one time. If your balancegoes over the limit, you will most likely be hitwith a service charge. To figure out how much youcan use the card, subtract the current balancefrom $2,500 and that is your available credit(right now, it is $275...when you pay the $50,your balance will come down a little (probablyabout $20 with finance charge) and your availablecredit will go up a similar amount (assuming youhaven't charged more in the meantime).
- answered by Steve D
Answer #2
Why in the world are you getting a credit card ifyou don't understand how it works?$2500 is thelimit. You can't exceed it. When you pay yourcredit card bill, you will have to pay itcompletely off before your limit is back to $2500.
- answered by Jonah
Answer #3
No your limit is 2500 total. Do not put anotherpenny on that charge card till it is paid in full. Going to the limit or over will increase yourinterest and the company will charge you a penaltyand then cancel your card. Read the paperwork yousigned.
- answered by Not I
Answer #4
Don't even think of charging any more on thecredit card until you significantly pay down thebalance. If you accidentally go over the creditlimit you will be charged a large overdraft feeand your interest rate will likely be raised.Since this is your first credit card and have alimited credit history, the bank may also closedown the account.
- answered by Michael T
Answer #5
Neither. The $2500 is the limit on the total thatyou are allowed to owe at any one time, not thelimit on the amount that you can use per cycle. The amount available to you during the next cyclewill be the $275 currently available plus the $50that you will have paid minus whatever financecharges the bank assesses.
- answered by StephenWeinstein
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