CC limit decreased

[dukebound85]

So my cc limit was decreased. I have never ever missed a payment, have always paid in full and it went down 80% from what I had

I called them and they told me I didn't need that high of a limit but still, I liked knowing I had it in case I needed it, in case I moved or anything like that

Is this the norm? Shouldnt your limit be tied to your credit score? I guess in short, I do not like how it got decreased

ugh

[strider42]

So my cc limit was decreased. I have never ever missed a payment, have always paid in full and it went down 80% from what I had

I called them and they told me I didn't need that high of a limit but still, I liked knowing I had it in case I needed it, in case I moved or anything like that

Is this the norm? Shouldnt your limit be tied to your credit score? I guess in short, I do not like how it got decreased

ugh

This is getting very common right now. They offered you a high limit before, probably an unreasonable one, because the economy was good. When it tanked, they started seeing if they were offering a reasonable amount. They decided they were offering you more then they could reasonably expect you to pay back. So no, your limit isn't linked to your credit score at all really, its linked to your ability to pay back the money. A credit score is one measure of that ability, but not the only one. Your income is another major aspect of that (and extending credit without paying attention to that detail is a big part of the current crisis)

Your credit card company basically offers you thousands of dollars in unsecured loans. If they lowered your limit, its because it makes sense. They make money on people being in debt, but still being able to pay it off.

The worst part is this actually hurts your credit score temporarily, as it increases your debt ratio. Oh well, there isn't much you can do about it.

[chrmjenkins]

I've never had a limit decreased, but two of my cards have gone up in interest rate recently where I haven't missed a payment. That is annoying.

[Sun Baked]

They are shrinking the limit of people with low balances on a high limit cards.

This isn't due to the people abusing the cards, or suddenly with a bad score.

It is to limit their exposure to people losing their jobs and using the credit cards to survive.

---

You've been profiled as a bad risk, aka having too much unused available credit.

[yg17]

They are shrinking the limit of people with low balances on a high limit cards.

This isn't due to the people abusing the cards, or suddenly with a bad score.

It is to limit their exposure to people losing their jobs and using the credit cards to survive.

---

You've been profiled as a bad risk, aka having too much unused available credit.
So I guess the fact that across a couple cards, I have $18,000 in available credit and currently have a total balance of $9.99 due to an iTunes purchase a few hours ago that I've not yet had a chance to pay should mean that I'll be seeing my limit slashed soon?

[Sun Baked]

So I guess the fact that across a couple cards, I have $18,000 in available credit and currently have a total balance of $9.99 due to an iTunes purchase a few hours ago that I've not yet had a chance to pay should mean that I'll be seeing my limit slashed soon?

Probably, but all this credit card limit plays and rate hikes are returning the credit card companies to the front burner in DC as the evil corporations they are.

Of course you could end up with a free dinner for two, to a restaurant chain in another state, along with a closed account notice.

[mscriv]

Don't sweat it. Having available credit on credit cards is a false sense of security and dangerous. Besides, I've had creditors tell me that having too high a limit means you are more of a risk and they will count it against you because they're afraid you'll get in over you head and then not be able to make your payments. Live on less than you make and build up a cash savings account as your security fund if something goes wrong. Especially in this economy, using credit/debt as your emergency plan is too risky. Genuine savings = peace of mind. :D

[njl]

to the OP:

go to the forums at myfico.com or creditboard.com so you can understand what's going on.

some of the advice here is amusing at best (just some of it)
:)

[ChrisA]

So my cc limit was decreased. I have never ever missed a payment, have always paid in full and it went down 80% from what I had

Don't worry it's not you. The bank is trying to lower it's potential risk. They are trying to position them selves so that the bank looks better on a balance sheet. They likely reduced limits on many many customers just to get the their total reduced

Banks are required to cary a cash reserve to cover them is worst case scenarios. They are reducing the size of that worse case so that they can put that reserve to better use.

[Rodimus Prime]

They are shrinking the limit of people with low balances on a high limit cards.

This isn't due to the people abusing the cards, or suddenly with a bad score.

It is to limit their exposure to people losing their jobs and using the credit cards to survive.

---

You've been profiled as a bad risk, aka having too much unused available credit.

To add to this the CC industry is currently try to shed about 2 Trillion in available credit.

[sushi]

One of my credit cards was recently cancelled.

I received a nice note that I was in good standing but it appeared that their product did not meet my needs and therefore they cancelled the account. Their basis was that I had not used their credit card in over 24 months.

Personally, I kept it as a backup in case of emergencies.

[CalBoy]

One of my credit cards was recently cancelled.

I received a nice note that I was in good standing but it appeared that their product did not meet my needs and therefore they cancelled the account. Their basis was that I had not used their credit card in over 24 months.

Personally, I kept it as a backup in case of emergencies.

I had the exact same thing happen to me about six weeks ago. A card I had opened early on and kept around primarily as backup was canceled by the company. I hadn't used the card in well over two years, so I guess it was fair.

Still, you don't like the feeling of having your available credit reduced. :o

[anjinha]

My credit card limit was increased. :D

[sushi]

I had the exact same thing happen to me about six weeks ago. A card I had opened early on and kept around primarily as backup was canceled by the company. I hadn't used the card in well over two years, so I guess it was fair.

Still, you don't like the feeling of having your available credit reduced. :o
Glad to hear that I am not the only one. It really came as a surprise to me.

When I first got my credit card, I used it a few times. Then didn't use it for over 24 months.

Was this the same for you? Did you ever use your card before you didn't, if that makes sense?

[iJohnHenry]

They giveth, and they taketh away. ;)

My AMEX, over the years, has gone astronomic, through no request of mine.

It's like the were teasing me to go out and buy some big-ticket item. No thanks!! :mad:

My M/C has increased some, but no where near the same level. :cool:

I always pay them off anyway, so if I need something large I would save the $$ first, then use the AMEX to purchase it. Better Air Miles. :p


PS: Both are "free" cards, BTW.

[Teh Don Ditty]

As other posters have said, this is becoming the norm in this day and age due to the economy. Everybody is getting punished.

My longest card that I've had went from a fixed to a variable rate and I wasn't happy (there's no balance on it).

My newest card actually gave me an increase. Go figure.

[Zombie Acorn]

This hurts your credit rating too btw.

[dukebound85]

They are shrinking the limit of people with low balances on a high limit cards.

This isn't due to the people abusing the cards, or suddenly with a bad score.

It is to limit their exposure to people losing their jobs and using the credit cards to survive.

---

You've been profiled as a bad risk, aka having too much unused available credit.

wait, so did my credit score go down?

i have never missed a payment in regards to anything and hold a nice paying job

wtf am i suppose to do? this is crazy

[chrmjenkins]

wait, so did my credit score go down?

i have never missed a payment in regards to anything and hold a nice paying job

wtf am i suppose to do? this is crazy

Yes, because your available credit decreased.

[Teh Don Ditty]

^ your credit score could decrease because you no longer have the same amount of credit.

example: before they cut it you had $10k. after the cut you have $5k. So you've now lost $5k in credit which negatively effects your score.

[dukebound85]

that isnt fair....

[Dmac77]

wait, so did my credit score go down?

i have never missed a payment in regards to anything and hold a nice paying job

wtf am i suppose to do? this is crazy

There isn't anything that you can do. It's really unfair. The cc companies won't be able to pull this crap much longer, which a silver lining of sorts, I guess. Sorry that this happened to you.

Don

[Teh Don Ditty]

that isnt fair....

Nope. It's the businesses and the consumers fault. Instead of cutting their losses, they are making everybody pay (if you will).

I would find another company if I were you.

[SpaceKitty]

I had a card each for all three Gap stores. Never ussed the Banana Republic card so they closed it after a year. I used the Gao card allot and even got upgraded to the Gap Silver card and paid off the balance a few times. Finally used the Old Navy card once and the next month, got a notice saying they were lowering my limit on it. All three cards are through the same bank and the Gap card never got lowered. Never late on payments either.

[emt1]

My credit card company tried to increase my interest rate, but I actually read the fine print and found that if I wrote them a letter rejecting the rate increase, it would stay the same. The account was also closed, but I was planning on doing that anyways after paying off the balance.

[chstr]

they are trying to avoid people that lose their jobs from paying off the debt that cant be cancelled in a chapter 7 with their credit cards before filing, because cc debt is cancelled in chapter 7.

[sushi]

^ One reason interest rates are so high. The credit card companies have to make up for losses due to some card holders not paying back what they owe.

I know of one individual who ran up 80 grand in cc charges. Declared bankruptcy. Then did it again. Only about 70 grand the second time. Declared bankruptcy a second time. About 150 grand in cc debt erased.

[CalBoy]

Was this the same for you? Did you ever use your card before you didn't, if that makes sense?

I had used it for a bit in the beginning (maybe 6 months), but then pretty much left it to be my "emergency" card.

[sushi]

I had used it for a bit in the beginning (maybe 6 months), but then pretty much left it to be my "emergency" card.
Same here.

So it looks like the credit card companies are strictly looking at a use or loose concept. Granted both of use hadn't used our cards in over 24 months but you would think they would send a letter letting you know that you need to use it if you don't want to loose it.

[mysterytramp]

^ your credit score could decrease because you no longer have the same amount of credit.

example: before they cut it you had $10k. after the cut you have $5k. So you've now lost $5k in credit which negatively effects your score.

Or ... you could just go out and get another card. Despite the crappy economy, there's no shortage of plastic.

mt

[gnasher729]

^ your credit score could decrease because you no longer have the same amount of credit.

example: before they cut it you had $10k. after the cut you have $5k. So you've now lost $5k in credit which negatively effects your score.

I would think high credit card limits would count against you. Say you want to borrow $20,000 to buy a nice new car. According to your income, you can afford to pay back the money. And according to previous history, you are not in a habit of missing payments. So everything is fine. But if you have ten credit cards with $10,000 limit each, you could spend $100,000 on a whim, with no chance of paying it back. So the car company cannot be sure that you can pay tem back.

[Teh Don Ditty]

Or ... you could just go out and get another card. Despite the crappy economy, there's no shortage of plastic.

mt

I did mention that in one of my other posts if I'm not mistaken.

I would think high credit card limits would count against you. Say you want to borrow $20,000 to buy a nice new car. According to your income, you can afford to pay back the money. And according to previous history, you are not in a habit of missing payments. So everything is fine. But if you have ten credit cards with $10,000 limit each, you could spend $100,000 on a whim, with no chance of paying it back. So the car company cannot be sure that you can pay tem back.

It goes both ways (no pun intended) If you have those 10 cards with $10k limits and you've used only say $20k spread across the 10 cards, most companies will say he/she uses their credit wisely.

The thing with auto loans is that they have collateral (the car) so they won't have a problem extending credit. They could always just give you a loan with a higher interest rate, if they so desired.

[rhett7660]

One of my credit cards was recently cancelled.

I received a nice note that I was in good standing but it appeared that their product did not meet my needs and therefore they cancelled the account. Their basis was that I had not used their credit card in over 24 months.

Personally, I kept it as a backup in case of emergencies.

This has happened to me also. Thank god I have another one from my bank to use just in case of the unexpected emergency that life tends to throw at you.

[sushi]

This has happened to me also. Thank god I have another one from my bank to use just in case of the unexpected emergency that life tends to throw at you.
I guess the morale to the story, is to use your card every once in a while -- say at least every year -- to keep it current.

Probably a simple grocery or gas purchase would be plenty.

IMHO, it is much easier to keep a card than get a new one for emergency purposes. That is assuming that you spent time doing some research to find the cards that provide the best options and rates for your needs.

[barr08]

I guess the morale to the story, is to use your card every once in a while -- say at least every year -- to keep it current.

Probably a simple grocery or gas purchase would be plenty.

IMHO, it is much easier to keep a card than get a new one for emergency purposes. That is assuming that you spent time doing some research to find the cards that provide the best options and rates for your needs.

I have one CC which I use for all purchases over $100. Most often, I pay off whatever I spend right away, but I want to keep the credit card active. Having a Bank of America credit card and bank account is great, because I can just go on the site and transfer funds around every which way!

Edit: I'm a 22 year old just out of college working in IT, so I may not be in the same situation as some of the other ppl here.

[Rodimus Prime]

I guess the morale to the story, is to use your card every once in a while -- say at least every year -- to keep it current.

Probably a simple grocery or gas purchase would be plenty.

IMHO, it is much easier to keep a card than get a new one for emergency purposes. That is assuming that you spent time doing some research to find the cards that provide the best options and rates for your needs.

That is one way to do it. I currently have 2 credit cards. My primary is an american express so at times I am forced to use my back up card.

I am thinking about getting a 3rd credit card. The 3rd card would go in a desk draw and hardly ever be used. I would mostly have it in case I lost my wallet so I would still have access to my money while everything is being replaced.

[Zombie Acorn]

^ One reason interest rates are so high. The credit card companies have to make up for losses due to some card holders not paying back what they owe.

I know of one individual who ran up 80 grand in cc charges. Declared bankruptcy. Then did it again. Only about 70 grand the second time. Declared bankruptcy a second time. About 150 grand in cc debt erased.

He would have had to wait 8 years in between filings if he went for chapter 7 (complete wipe), in which case the bankruptcy would have been on his record for ~10 years, so if a credit card company let him have limits up to 70k within 10 years time I blame them. Its like giving drugs to a crack addict and expecting them back at the end of the month.

[Teh Don Ditty]

^Bankruptcy policies aren't the same everywhere in the world.

[Zombie Acorn]

^Bankruptcy policies aren't the same everywhere in the world.

I forget that we have a more diverse geographical group here. :D

[ucfgrad93]

I know of one individual who ran up 80 grand in cc charges. Declared bankruptcy. Then did it again. Only about 70 grand the second time. Declared bankruptcy a second time. About 150 grand in cc debt erased.

While I don't know the situation, and I could be totally wrong in my judgment; but this person sounds like a real scum-bag.

[Teh Don Ditty]

I forget that we have a more diverse geographical group here. :D

:D It's ok

[dukebound85]

I guess the morale to the story, is to use your card every once in a while -- say at least every year -- to keep it current.

Probably a simple grocery or gas purchase would be plenty.

IMHO, it is much easier to keep a card than get a new one for emergency purposes. That is assuming that you spent time doing some research to find the cards that provide the best options and rates for your needs.

i use both of my cards all the time

the one that just got slahed had a balance of 2300 on it which i paid off in full. yet the cut me down anyways.

[Rodimus Prime]

Man if my primary CC had it limited cut in half it would hurt. Before I request the limited upgrade to 4k from 2k I was quite often bumping the edge of the limit. If pretty much forced me to pay it off as soon as the bill was sent and if I ran anything big I would have to pay down the balance before doing it.

Now with 4k it gives me more breathing room so I do not have to pay it off as soon as the bill comes.

I will like to point out I pay off the bill in full every time. Just I would rather not have to rush to do it and get to it when I get around to it.

[sushi]

While I don't know the situation, and I could be totally wrong in my judgment; but this person sounds like a real scum-bag.
He was and is.

It was amazing how quick he was able to build up his credit after going bankrupt the first time, only to do it a second time.

i use both of my cards all the time

the one that just got slahed had a balance of 2300 on it which i paid off in full. yet the cut me down anyways.
I have a couple that I use regularly.

I have a some others that are for emergency use only. They have larger limits.

Man if my primary CC had it limited cut in half it would hurt. Before I request the limited upgrade to 4k from 2k I was quite often bumping the edge of the limit. If pretty much forced me to pay it off as soon as the bill was sent and if I ran anything big I would have to pay down the balance before doing it.

Now with 4k it gives me more breathing room so I do not have to pay it off as soon as the bill comes.

I will like to point out I pay off the bill in full every time. Just I would rather not have to rush to do it and get to it when I get around to it.
I like having high limits so that I can charge what is needed.

I have a friend who unfortunately has had 3 family deaths since the first of the year and traveled back to the states each time. Plane, hotel, rental car, etc. costs add up quickly. Having a credit card allowed him to go when needed. Then upon return he an adjust/move funds as needed to pay off the debt. Very convenient in those types of emergencies.