If they had monitored their credit report and their credit limit, they probably would not be at the difficult debt level that could cause them to not qualify when they fill out a home mortgage loan application.
Some people take advantage of several options that are offered with credit cards and work their way out of debt the smart way. They have the option of getting a credit card with an attractive introductory rate and then transfer high balances from other credit cards and save money in the long run. The introductory rate might be good for six months, and during that time, the consumer is not paying high interest or running the chance that they will incur over limit fees or late charges.
Some people use a generous credit line on a low-rate credit card as a form of debt consolidation. When the balances of other credit cards are transferred over, many people take that time as an opportunity to cancel credit cards that require an annual renewal fee. Depending on the number of credit card accounts which are canceled, the consumer could save thousands of dollars by doing one simple thing.
The people that feel they must have a credit card in their possession at all times are the people that use credit cards as a status symbol. They may have ten or more credit cards in their wallet, with balances that are zero or just above it. The number of credit cards that a consumer has is considered when applying for a home mortgage loan. It is better to cut the temptation of possible debt than to incur debt just to establish a credit history.
To be considered for credit rating, a consumer will have to make 12 months of on-time payments. Otherwise, they are incurring debt for no real purpose other than being able to say they own ten credit cards. With that type of outlook on credit, debt and financial responsibility, the consumer will probably never be able to say that they own a home of their own. A credit report will say many things to a lender and excess debt to income ratio is not what they want to hear or see on paper.
