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CC limit decreased

dukebound85

dukebound85

macrumors Core
Original poster
Jul 17, 2005
19,224
4,352
5045 feet above sea level
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
 
dukebound85 said:
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
Click to expand...

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.
 
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.
 
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.
 
Sun Baked said:
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.
Click to expand...
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?
 
yg17 said:
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?
Click to expand...

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.
 
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
 
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)
:)
 
dukebound85 said:
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
Click to expand...

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.
 
Sun Baked said:
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.
Click to expand...

To add to this the CC industry is currently try to shed about 2 Trillion in available credit.
 
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.
 
sushi said:
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.
Click to expand...

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:
 
CalBoy said:
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:
Click to expand...
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?
 
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.
 
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.
 
Sun Baked said:
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.
Click to expand...

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
 
^ 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 said:
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
Click to expand...

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
 
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.
 
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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