CC limit decreased

Discussion in 'Community Discussion' started by dukebound85, Apr 23, 2009.

  1. dukebound85 macrumors P6

    dukebound85

    Joined:
    Jul 17, 2005
    Location:
    5045 feet above sea level
    #1
    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
     
  2. strider42 macrumors 65816

    strider42

    Joined:
    Feb 1, 2002
    #2
    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.
     
  3. chrmjenkins macrumors 603

    chrmjenkins

    Joined:
    Oct 29, 2007
    Location:
    CA
    #3
    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.
     
  4. Sun Baked macrumors G5

    Sun Baked

    Joined:
    May 19, 2002
    #4
    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.
     
  5. yg17 macrumors G5

    yg17

    Joined:
    Aug 1, 2004
    Location:
    St. Louis, MO
    #5
    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?
     
  6. Sun Baked macrumors G5

    Sun Baked

    Joined:
    May 19, 2002
    #6
    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.
     
  7. mscriv macrumors 601

    mscriv

    Joined:
    Aug 14, 2008
    Location:
    Dallas, Texas
    #7
    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
     
  8. njl macrumors regular

    Joined:
    Mar 15, 2009
    Location:
    SAT
    #8
    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)
    :)
     
  9. ChrisA macrumors G4

    Joined:
    Jan 5, 2006
    Location:
    Redondo Beach, California
    #9
    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.
     
  10. Rodimus Prime macrumors G4

    Rodimus Prime

    Joined:
    Oct 9, 2006
    #10
    To add to this the CC industry is currently try to shed about 2 Trillion in available credit.
     
  11. sushi Moderator emeritus

    sushi

    Joined:
    Jul 19, 2002
    Location:
    キャンプスワ&#
    #11
    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.
     
  12. CalBoy macrumors 604

    CalBoy

    Joined:
    May 21, 2007
    #12
    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. :eek:
     
  13. anjinha macrumors 604

    anjinha

    Joined:
    Oct 21, 2006
    Location:
    San Francisco, CA
  14. sushi Moderator emeritus

    sushi

    Joined:
    Jul 19, 2002
    Location:
    キャンプスワ&#
    #14
    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?
     
  15. iJohnHenry macrumors P6

    iJohnHenry

    Joined:
    Mar 22, 2008
    Location:
    On tenterhooks
    #15
    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.
     
  16. Teh Don Ditty macrumors G4

    Teh Don Ditty

    Joined:
    Jan 15, 2007
    Location:
    Maryland
    #16
    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.
     
  17. Zombie Acorn macrumors 65816

    Zombie Acorn

    Joined:
    Feb 2, 2009
    Location:
    Toronto, Ontario
  18. dukebound85 thread starter macrumors P6

    dukebound85

    Joined:
    Jul 17, 2005
    Location:
    5045 feet above sea level
    #18
    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
     
  19. chrmjenkins macrumors 603

    chrmjenkins

    Joined:
    Oct 29, 2007
    Location:
    CA
    #19
    Yes, because your available credit decreased.
     
  20. Teh Don Ditty macrumors G4

    Teh Don Ditty

    Joined:
    Jan 15, 2007
    Location:
    Maryland
    #20
    ^ 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.
     
  21. dukebound85 thread starter macrumors P6

    dukebound85

    Joined:
    Jul 17, 2005
    Location:
    5045 feet above sea level
  22. Dmac77 macrumors 68020

    Dmac77

    Joined:
    Jan 2, 2008
    Location:
    Michigan
    #22
    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
     
  23. Teh Don Ditty macrumors G4

    Teh Don Ditty

    Joined:
    Jan 15, 2007
    Location:
    Maryland
    #23
    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.
     
  24. SpaceKitty macrumors 68040

    SpaceKitty

    Joined:
    Nov 9, 2008
    Location:
    Fort Collins Colorado
    #24
    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.
     
  25. emt1 macrumors 65816

    Joined:
    Jan 30, 2008
    Location:
    Wisconsin
    #25
    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.
     

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