When Does a Credit Card Company Increase Your Balance?


Quick Answer

Credit card companies increase a balance when the monthly interest is computed on any positive remaining balance that hasn't been paid. The interest is added onto the balance, along with any fees if the minimum monthly payment is late or not made. Zero or negative balances are not charged interest.

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When Does a Credit Card Company Increase Your Balance?
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Full Answer

LaToya Irby, a credit and debt management expert, explains that a good credit card balance is under 30 percent of the card credit limit. Good in this sense means that it is positively impacting a credit score. Outstanding balances above 30 percent typically have higher minimum payments, higher interest charges and can lower a personal credit rating. The article also suggests that good credit card management means never charging more in a monthly period than the pool of discretionary income, defined as the amount of income after expenses and taxes.

Credit card companies periodically increase the limits of a credit card balance if a customer has a proven record of timely payments. Typically, a limit is set based on the credit report of an individual, as well as the understanding of the fiscal ability of a consumer to pay a balance back. Credit card customers can petition for a limit increase, although without substantial credit score evidence to warrant it, many issuers turn such requests down.

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