Credit cards with no spending limit can be difficult to find and qualify for, but people who have one have reported that it makes managing their personal finances a lot easier. Getting a no limit credit card can make paying bills, dealing with emergencies, and saving for larger goals much easier. A credit card with no limit is a credit account that has no restrictions on the amount that can be charged to it every month. There are no fees for going over a maximum balance. It is important to note that there are some rules that come with these cards. Many of them have a minimum required charge amount. This is the minimum amount of purchases that must be made on the card every month or every year. If you are applying for a card with this restriction, make sure that you can afford to make that many purchases. All of these cards will require you to make a minimum payment every month. Often, this minimum payment is between three and five percent of the total balance on the card. Because of this minimum payment, it is important to carefully consider what type of purchases are put on the card. For example, while many people with these cards realize that it is possible to charge a new car or even a new home, the minimum monthly payment may make it a bad financial decision to put these types of purchases on the card. Finally, it is important to realize that these cards often come with fees for late payments or not being able to make the minimum payment. Just like any credit card, it is important to pay attention to these fees and make sure they are affordable. Qualifying for a no limit credit card can be difficult to do. Because of the potential to charge millions of dollars’ worth of merchandise, banks have typically only offered these cards to people with excellent credit scores and significant assets. In addition to a standard credit card application, applicants for these cards must also be able to show that they have the assets to cover major purchases on the card. In some cases, the issuers of these cards will require a customer to tie one of their assets to the card as a form of collateral. This can be a savings or checking account with a minimum balance, or a hard asset such as a piece of real estate. In the event that you are unable to make payments on the card, the account will be closed and the assets that are put up as collateral will be seized by the bank. Once you have qualified for a card like this, however, it can make managing your finances much easier. Many people who have these cards use them as their only credit cards. Without a credit limit, it is not necessary to have multiple credit cards and multiple bills to juggle every month. Because there is no limit to how much is charged, many people choose to put all of their expenses on their credit card. A lot of families use the cards to charge all of their utility bills, loan payments, groceries, and other items. By doing this, they are able to pay the same amount every month for their basic expenses. For example, many people have bills that can vary by several hundred dollars every month. By putting all of their bills on a credit card, it is possible to pay the same amount every month. In months when bills are higher than expected, this makes it possible to continue an even rate of savings. When the amount owed on bills drops, this extra amount can be paid off. By doing this, a lot of people report that budgeting becomes a lot easier. Rather than trying to juggle multiple amounts over dozens of bills, charging everything means having just one bill every month, and you get to choose how much you want to pay towards it.
August 29, 2013