Tan, you're expecting people to think - silly!
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What is your credit card limit?
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Tan is right Robyn.
Your CC limit affects your borrowing capacity in two ways.
Firstly it is counted in the LVR formula because you could go out and max that card tomorrow.
Secondly 5% of the amount is used in the DSR calculation whether you pay it off each month or not.
In your circumstances the CC limit probably makes very little difference to your capacity which is why the banks have not said anything to you.
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Originally posted by NZGEMS View PostTan the limit doesn't count as debt if you pay it off monthly, I normally pay mine off and it has never been a problem, I just write the limit in and put paid off monthly on it.
Every loan application of mine has asked what your credit card limits are, and they take this into account for your servicing whether you pay it off in full or not (which we do).
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Not every lender takes your limit into account, some are happy to use the average balance if they can have the last 3 months history. The limit is definitely not taken into account in terms of LVR.Hamish Patel | ph: 09 625 4693 | mob: 021 625 693
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My cc limit was gradually increased by the bank to nearly $40,000. I have now had it reduced and asked for no more auto increases. In my last loan application (mid 2007) the lender took into account that I paid the card off each month, but with earlier loans the lender insisted on taking the credit limit when determining serviceability.
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Wonder How This Will Pan Out?
It'll be interesting to see how this works out.
Not just at the check-out, but also with ticket
pricing. Could we end up like USA, where most
prices are $xxxx plus tax, except ours will be
plus credit card surcharge.
Commerce Commission Reaches Agreement With Institutions On Credit Cards
05/10/2009
The Commerce Commission says agreements announced
today with seven financial institutions on credit cards could
save retailers tens of millions of dollars.
The agreements with the financial institutions follow
settlements reached in August with Visa and MasterCard
that paved the way for credit card interchange fees in New
Zealand to be set by competition.
A result of the settlements is that merchants can surcharge
customers when they use credit cards to make purchases.
Today the commission said the agreements ushered in a new
competitive landscape for the credit card industry in this
country.
Commission chairman Mark Berry said savings to retailers
during the next three years as a result of the settlements were
expected to be in the order of $70 to $80 million.
"This represents a significant reduction in the cost of doing
business for retailers who offer credit card payment options,
and we would expect to see this passed on to consumers
over time through lower retail prices," Dr Berry said*.
The institutions announced today to have reached
settlements with the commission are ANZ National, ASB,
Westpac New Zealand, Bank of New Zealand, Kiwibank/
New Zealand Post, TSB Bank, and The Warehouse
Financial Services.
Dr Berry said the commitments made by the institutions
would put immediate downward pressure on interchange
fees while ensuring that those fees remained transparent and
open to competitive forces.
The commission said that in High Court proceedings it
claimed that the parties breached the Commerce Act by
agreeing and implementing the Visa and MasterCard credit
card scheme rules in New Zealand which, among other
things, provided for the payment of multilateral interchange
fees.
The commission said it alleged those rules substantially
lessened competition by artificially inflating the cost to
retailers of accepting credit cards and ultimately raising
prices paid by all consumers.
Each of the financial institutions would contribute towards
a combined total of $1m to cover the unmet costs of the
commission's proceedings, the commission said. It
previously recovered $5.6m towards its costs from Visa and
MasterCard.
Also today, a group of retailers said it had reached
a settlement with MasterCard over interchange fees and
scheme rules.
The settlement, along with the commission's settlement with
MasterCard and Visa, was significant for the retail industry,
spokeswoman Louise Evans said.
The settlement reaffirmed retailers' ability to pass on the cost
of accepting credit card payments through a reasonable
surcharge as provided in MasterCard's settlement with the
commission, which retailers were previously prevented from
doing.
"This new level of transparency means that for the first time
the actual cost of using a credit card will be known to
consumers," Ms Evans said.
"This may ultimately result in customers choosing to use
different payment options. It is this development which may
have the greatest impact for customers."
The retailers group was made up of Progressive, Foodstuffs,
Dick Smith, Farmers, Mississippi, Noel Leeming and
Whitcoulls.
"After spending the last three years preparing to go to court,
we're pleased to have a satisfactory result and be able to get
back to our businesses," Ms Evans said.
* I wonder which fantasy world Dr Berry lives in?
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Umm doesn't seem like a smart move....
A result of the settlements is that merchants can surcharge
customers when they use credit cards to make purchases.
I know I'd shop at the store that didn't charge me a surcharge for using my credit card.
Cheers,
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Considering the interest rate 'mark up'' between the official cash rate and the interest rate being charged on CC's, I don't see why the banks cannot absorb the merchant charges and simply offer it to merchants as a service the bank can provide them to gain their banking service...
yeah i know, dream on.S.
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Originally posted by NESW View PostConsidering the interest rate 'mark up'' between the official cash rate and the interest rate being charged on CC's, I don't see why the banks cannot absorb the merchant charges and simply offer it to merchants as a service the bank can provide them to gain their banking service...
yeah i know, dream on.
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Hopefully, next stop NZ.
RBA cracks down on credit card charges
The Reserve Bank has officially put an end to the credit and debit card surcharge rort practised by Cabcharge, Qantas, Virgin et al – at last!
www.smh.com.au/business/rba-cracks-down-on-credit-card-charges-20120612-207sg.html
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