Too much credit offered by Discover.

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cyberarmy

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So I applied for Discovery Gold Credit Card last Friday and got a call today, after a few questions I had been approved a R50,000.00 credit on the card. I though NCA and the credit crunch will make these company's more cautious or are they more desperate? Or is my credit record that good and they offering me a higher limit?

I had already requested them to lower the limit by more than half.
 
Looking at the stuff in your signature I would guess that you would qualify for 50k cc.
 
cyberarmy said:
So I applied for Discovery Gold Credit Card last Friday and got a call today, after a few questions I had been approved a R50,000.00 credit on the card. I though NCA and the credit crunch will make these company's more cautious or are they more desperate? Or is my credit record that good and they offering me a higher limit?

I had already requested them to lower the limit by more than half.
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Just a cheap trick to rub it in our faces :D
/RAS/ :whistle:
 
Cautious, no no dude in times like this people are spending less which means they are not spending their limits on the credit cards so credit card companies are actually looking for business. what better way of getting business than offering a person with a good credit record 50k over xmas :D.
 
But c'mon people, R50k?!

I seriously think think that if you're someone that's tempted very easily, you should immediately lower that limit to somewhere like R20k or even lower. How much do you earn if that's OK to ask?
 
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feo said:
But c'mon people, R50k?!

I seriously think think that if you're someone that's tempted very easily, you should immediately lower that limit to somewhere like R20k or even lower. How much do you earn if that's OK to ask?
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Hey, I have good self control in terms of spending, but I am still not very comfortable with the huge credit which I don't really need. Will pm you my net earning.
 
cyberarmy said:
Hey, I have good self control in terms of spending, but I am still not very comfortable with the huge credit which I don't really need. Will pm you my net earning.
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That's good but the NCA is meant to regulate how much credit is dished to the average joe, Discovery should actually be reported for handing out so much. First we need to know how they calculate what limit is approriate for each individual...even so, compared to your net, the limit is not in line with your net earnings IMHO.
 
feo said:
That's good but the NCA is meant to regulate how much credit is dished to the average joe, Discovery should actually be reported for handing out so much. First we need to know how they calculate what limit is approriate for each individual...even so, compared to your net, the limit is not in line with your net earnings IMHO.
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Do I get any reward by reporting them to NCR?:p

Anyway I had asked them to send me a new quote for R20,000 Limit.
 
feo said:
A new quote? :confused:
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They sent me a quote/offer for the R50,000 limit and interest rate. I need to sign and send it back to them otherwise they can't issue me the card. So I asked them to send me a new one with lower limit, as I have not yet signed the first quote.
 
R50 000 is not that much when you take an overseas trip. Hotel and meals alone could cost nearly that... those limits are targeted at business people, not young kids starting out in the world.

If I'm not mistaken, American express gold is automatically that limit.

Imagine going on a business trip with a R20 000 limit - could be a bit embarrasing.
 
3G4me said:
R50 000 is not that much when you take an overseas trip. Hotel and meals alone could cost nearly that... those limits are targeted at business people, not young kids starting out in the world.

If I'm not mistaken, American express gold is automatically that limit.

Imagine going on a business trip with a R20 000 limit - could be a bit embarrasing.
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Well, you could always save up money in the card too you know. Either way, you pay now or later, but later might have interest attached (while you can earn interest with a possitive balance).

So you have a R20 000 limit, but have R30 000 positive on the card, viola, you still have R50 000 readily available for the trip...
 
There are 3 issues here.

The first issue is that discovery only require 5% of the outstanding balance to be repaid, so under NCA all they need to determine is that you have enough disposable income to settle that 5% each month.

This highlights the second issue, and probably the main reason for the high limits. Credit cards can be used for Transactional Spending. When I got my discovery credit card, half my transactions that I used to pay via EFT or Debit card, I started putting through my discovery credit card. Why? Well, I get cash back discounts, discovery miles and 55 days free interest - which basically means I am saving my salary for a whole month before I settle the outstanding balance in the card. If I had a lower limit, I wouldn't be doing all the transacting. I probably hit my limit every month and settle about 99% of it on payment date.

The final issue is the actual limit. I am more comfortable having the higher limit. As an adult, I am perfectly capable of knowing what I can afford to spend and what I can't. Just because Discovery gave me a high limit, it certainly does not mean you have to go out and spend it? As for being worried about your card being stolen, there is fraud and lost card protection on all Visa's so that's a non-issue. I prefer to have extra-facility available to help me through a bad month if I need it or if there are large unexpected expenses that I CAN'T AVOID. Also, as mentioned, most of my credit card transactions are what I would have spend already - so the higher limit enables me to put everything through my card (while earning interest on my cash).

Most people see credit cards as bad, and you shouldn't have debt. I prefer them. I get rewards, the retailers pay the transaction fees, 25-55 days interest free and convinience. What's not to love?

I hardly spend cash these days and all my transactional spending happens on my 3 credit cards while my full salary sits in my cash management account earning interest while I enjoy the interest free period of the credit card. I am maximizing the benefits.

Each to their own I guess. One thing I can bet is Discovery would have been happy to fax you a new quote with a lower limit if requested. Rather let them offer me the highest limit they are willing too, and if I don't want to spend it all, or want it reduced - it's my choice. Otherwise next week there will be a thread, OMF discovery only gave me a R2000 limit. WFT can I buy with that.
 
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broken1 said:
Most people see credit cards as bad, and you shouldn't have debt. I prefer them. I get rewards, the retailers pay the transaction fees, 25-55 days interest free and convinience. What's not to love?

I hardly spend cash these days and all my transactional spending happens on my 3 credit cards while my full salary sits in my cash management account earning interest while I enjoy the interest free period of the credit card. I am maximizing the benefits.
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+1

If you can't exercise self control with a credit card, then chances are that overspending is low on your list of problems ;)
 
I agree, first cut your card is what you read in most advertising articles.
If it concerns managing your money. It is only discipline manage it right from the beginning.So a higher limit is allways better. I only pay with the card.
55 days is a bonus.
 
broken1 said:
There are 3 issues here.

The first issue is that discovery only require 5% of the outstanding balance to be repaid, so under NCA all they need to determine is that you have enough disposable income to settle that 5% each month.

.
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and then they nail you on interest on the outstanding balance
 
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