Ad Blocker Detected
Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by disabling your ad blocker.
Several credit card companies have stopped offering credit cards as easily as they were a couple of years back. The reason is that the existing customers seem to find it really difficult to repay the principle amount of money leave alone the interest. This is why the credit card companies fear issuing cards to everyone just like that. Credit reduction is on the rise to ensure that the customers are at least capable of settling the principle to the loan lender.
Credit debt reduction may provide timely relief to the user from the huge debts. However, this is adversely going to affect his or her credit score. Credit score is found to be the ratio of debt to credit. Generally, this ratio has to be low to indicate that you are financially stable. But, if the card company limits your credit, then your score will tend to rise. An increase in the score implies that you are on the verge of going bankrupt.
Customers or credit card holders should be aware of how much debt is payable by that particular person and should abide by it. Unfortunately, some of the users tend to purchase goods for the entire credit limit that their card offers them with. The credit card company realizes your incapability in paying up your debts and hence agrees to a reduction in your interest rate if you request for it.
When a card user requests for reduction in the credit interest rate, then the credit score does go low. However, it saves you from going bankrupt. You will reach the red margin but you can always make up for it once you are back on your feet financially. This is probably the best method in lieu of filing bankruptcy with the company. While filing bankruptcy, your credit score falls totally and it becomes hard to recoup your financial status.
First of all, credit cards are meant for emergency only. They are not wonder lamps that give you everything you wish for. You should understand that you will be the debtor and you have to repay it in the near future. What’s worse is that you pay additional interest apart from the principle loan. Thus, think twice before you can purchase something with your credit card. Credit reduction is the only way out for people who are pushed to clear the debt somehow and relieve themselves from it.
Related Blogs
- Related Blogs on Low Credit Score Follows Credit Reduction
