Credit Card eZine - News and Articles about Credit Cards

Creditors give out credit card deals to those who show promise!

2007-05-17

If you are a consumer looking for the top credit card deals, you need to understand how creditors decide to help people. Many card holders just assume that credit card companies should lend to them because they are nice people- which doesn’t exactly work like that! Creditors look for specific things in the people they lend to and if you don’t have these characteristics it will be almost impossible to get a loan or a good credit card deal. Just what do creditors look for? Here are the top three personal characteristics:

1. Ability: What is your ability to pay back your debts? Are you living paycheck to paycheck or do you have some back up savings or investments that you can fall back on? Creditors will want to look at your occupation, how many years you worked there and what obligations you have (dependants, etc). A creditor probably won’t just hand you a credit card application if you don’t have the ability to pay it back. This is also how they calculate your credit limit.

2. Assets: If you don’t have a good amount of personal assets then a creditor is going to be wary about lending to you. Why? If anything ever did happen to you and you couldn’t repay your unsecured credit card debit (i.e. credit card debt) then your assets are sold to pay it off. If you don’t have any assets your debt is often written off, which creditors aren’t too fond of!

3. History: What is your credit history like? Creditors want to peek at your credit score to see where you currently stand. If you have a high enough score (usually 720+ out of 850) you will most likely get the instant approval credit card deals. The better your credit the lower your APR and the better chances of no fees. Creditors will also look at your stability- how long you have lived at your current address and how long you have been employed at your place of work.

Another thing to keep in mind is that different creditors will look at your information and decipher it differently. For instance, if you are applying online for a credit card that requires excellent credit it may be more difficult to get instant approval and they will be tougher on their standards. However, if you are filling out a credit card application for bad credit they may be easier on you and look past some negative information.

Creditors have limitations

Sometimes creditors act like they own all of your personal information and act as if you are at their disposal. This is far from the truth as credit card companies have certain limitations and they can’t discriminate according to gender, occupation, salary, race, color or religion. Creditors also can’t:

• Tell you not to apply for a credit card through them

• Refuse you the top credit card deals if you qualify under their standards

• Give you different terms on a credit card deal then someone of equal standing

• Close any of your accounts just because of your age or religion (among other things).

Creditors and age

One of the biggest disputes occurring with credit card companies has to do with the elderly and the retired. Creditors have no right to close or restrict a credit account just because someone hit retirement age. The laws are very strict in this regard because so many older people complained about getting ‘stiffed’ by their creditors. Creditors can ask for your age but they have no legal right to discriminate you because of it. Creditors also cannot:

• Give you a worse credit card deal because of how old you are

• Close your account and make you re-open another one because of your age

• Give you less credit limit then you deserve for your credit score/ credit history.