Simpler Smarter Savings

Available Credit

The card company sets the initial credit limit when the consumer or business owner first applies for a standard credit card. A consumer sets the credit limit when he or she first opens a secured credit card. The available credit may diminish immediately depending on the card company. For example, some card companies may decrease the customer’s available credit before it sends the card out because of the annual fee. The company may deduct processing fees and setup fees from the card with the consumer’s permission. The cardholder can replenish the available credit from that point at any time. The available funds will post to the credit card’s account within five business days in most cases.

As the consumer makes purchases with his or her card, the available credit declines. The credit card may or may not reflect the adjusted balance immediately. The time it takes for a new charge to affect the available balance depends on the credit card processing services that he merchant has. Credit card processing can take up to five to seven business days depending on the merchant account. A consumer must stay mindful of the expenses that he or she is placing on the card because of that.

A cardholder can end up incurring over-the-limit fees if he or she does not stay mindful of his or her expenses. The merchant will process the transaction through his or her merchant account provider. The credit card company may allow the consumer to charge his or her card beyond its available credit under certain circumstances. An over-the-limit fee is the fee that the cardholder will attach to the consumer’s account after it provides such a courtesy.

A credit card company will reward a consumer if it finds that the consumer makes timely payments and spends the money wisely. At that time the credit card company may provide the consumer with a credit line increase. A credit line increase will add funds to the person’s available credit. The consumer must establish a long-lasting positive payment history with the credit card company before it provides an increase, however. Some providers offer an increase after four months of timely payments, and other companies prefer to see six to nine months of timely payments. Credit card companies will look at the person’s overall credit report to see if the person is paying other providers, as well.