Anyone ever request a credit line decrease?

[Alone]

In my opinion, it shows a lack of control if you request a decrease. There's no logical reason to do so unless you think you can't control your spending habits.

 

[Eli]

Originally posted by: chusteczka

Originally posted by: aphex
...
Do credit cards ever allow you to request a credit decrease?

Yes, I do this regularly. I keep an available line of credit on my cards at an amount that I can pay back. For example, there is no reason for me to have a $10,000 credit line if I would have a hard time paying back $5,000 credit debt. Just make sure to talk to your credit provider and ensure they will refuse any charges that bring your debt above your credit limit, without charging you a late fee. This is how credit cards used to work before the credit providers realized they could earn more money by allowing these excessive charges, charging over the limit fees, and earning more interest on the increased debt.

Originally posted by: aphex
i've heard its good to keep 20-30% balance on your available credit, now my available credit is insane.

I believe this to be incorrect. Any advice provided with the goal of increasing your credit score is merely conjecture since the formula for calculating credit scores are well kept trade secrets by the credit companies. My understanding of credit is that common sense and thoughtfulness will win.

Originally posted by: aphex
well even so, i dunno if i like the idea of having that much available.... you saying i should just ignore it?

I also do not like having more credit available than I need. My view on credit cards is that they are easily used by thieves in situations of identity theft or even by fraudulent businesses that randomly decide to charge you for something. It is good to keep an available amount of credit that you need rather than what others can use.

Wow.. some people are paranoid. :Q

 

[chusteczka]

Originally posted by: Eli

Originally posted by: chusteczka

Originally posted by: aphex
...
Do credit cards ever allow you to request a credit decrease?

Yes, I do this regularly. I keep an available line of credit on my cards at an amount that I can pay back. For example, there is no reason for me to have a $10,000 credit line if I would have a hard time paying back $5,000 credit debt. Just make sure to talk to your credit provider and ensure they will refuse any charges that bring your debt above your credit limit, without charging you a late fee. This is how credit cards used to work before the credit providers realized they could earn more money by allowing these excessive charges, charging over the limit fees, and earning more interest on the increased debt.

Originally posted by: aphex
i've heard its good to keep 20-30% balance on your available credit, now my available credit is insane.

I believe this to be incorrect. Any advice provided with the goal of increasing your credit score is merely conjecture since the formula for calculating credit scores are well kept trade secrets by the credit companies. My understanding of credit is that common sense and thoughtfulness will win.

Originally posted by: aphex
well even so, i dunno if i like the idea of having that much available.... you saying i should just ignore it?

I also do not like having more credit available than I need. My view on credit cards is that they are easily used by thieves in situations of identity theft or even by fraudulent businesses that randomly decide to charge you for something. It is good to keep an available amount of credit that you need rather than what others can use.

Wow.. some people are paranoid. :Q

I consider my actions to be responsible but everyone has their own point of view.

How can anyone be sure that a large amount of unnecessary available credit as compared to their income does not hurt their credit score? Especially since the formula for calculating credit scores are not published publicly.

An additional disadvantage to a large amount of credit is if a spouse that has been provided access to said credit decides to increase spending habits. This can be even worse if a spouse is planning for a separation or divorce.

Just because bad things such as this happen to a relatively small percent of the population does not mean they cannot happen to you or me.

 

[kranky]

Originally posted by: chusteczka
How can anyone be sure that a large amount of unnecessary available credit as compared to their income does not hurt their credit score? Especially since the formula for calculating credit scores are not published publicly.

The exact formula for FICO scoring is not public, but what is known is the factors which go into the score.

35% payment history
30% amounts owed
15% length of credit history
10% new credit
10% types of credit used

What goes into the "amounts owed" score?
- Amount owing on accounts
- Amount owing on specific types of accounts
- Lack of a specific type of balance, in some cases
- Number of accounts with balances
- Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts)
- Proportion of installment loan amounts still owing (proportion of balance to original loan amount on certain types of installment loans)

So it's clear that your score can benefit from having high available credit lines for a given amount of usage. It's better score-wise to have $1,000 in reported utilization with a $10,000 credit line, than on a $5,000 credit line.

You can confirm all this for yourself at myfico.com.

 

[s0ssos]

Originally posted by: aphex

Originally posted by: shortspanishguy

Originally posted by: aphex
well even so, i dunno if i like the idea of having that much available.... you saying i should just ignore it?

I don't understand what bothers you about it. Can you explain?

I just don't like the idea that someone could charge a BMW 5 Series to my credit card... I trust myself, I've obviously been able to keep my score up enough for them to bump it to this level, but still, I just don't like having that potential there.

actually, if the person who stole your card did that, and you find out how they did that, you can make up all the money you lost.
people on fatwallet would pay loads to find out how to charge cars to credit cards (you can usually not charge, or only a certain amount)

 

[s0ssos]

Originally posted by: Alone
In my opinion, it shows a lack of control if you request a decrease. There's no logical reason to do so unless you think you can't control your spending habits.

what if you had your credit card with a billion in credit line, and some guy came over and kidnapped you. then he wanted you to buy him chips at the casino. for a billion dollars.
see, if you only had your little $1,000 credit line, you wouldn't have to worry about scenarios like this. you can just say, i only have a $1,000 credit line, i told the credit card issuer to never let me go over the limit. and the guy will say, oh, ok. we'll go find someone else

 

[Mo0o]

Your CC doesn't protect you from fraudulent charges?

 

[yhelothar]

Originally posted by: pcslookout
Good idea! Lowing ones credit is a lot better than increasing it. Gives you character and self control!

I would think having a high limit but having the discipline not to use it is self-control.

 

[shocksyde]

CREDITBOARDS

 

[josh0099]

Originally posted by: s0ssos

Originally posted by: Alone
In my opinion, it shows a lack of control if you request a decrease. There's no logical reason to do so unless you think you can't control your spending habits.

what if you had your credit card with a billion in credit line, and some guy came over and kidnapped you. then he wanted you to buy him chips at the casino. for a billion dollars.
see, if you only had your little $1,000 credit line, you wouldn't have to worry about scenarios like this. you can just say, i only have a $1,000 credit line, i told the credit card issuer to never let me go over the limit. and the guy will say, oh, ok. we'll go find someone else

Yea since you heard about people making other people buy stuff with their credit cards...Oh wait no...Anyway why are people so paranoid about having big credit lines? If you don't spend it you don't pay for it its that simple. If someone steals your card you aren't going to pay for it. There are federal laws protecting you if someone steals your card, I think you are only really liable for like $20 or something small like that, but most credit card companies don't even make you pay the $20 that you are liable for. A lot of credit card companies have free alert systems, so if something looks out of the ordinary they call you and make sure its you and not someone else....So really no reason to ask for a decrease, as its just helping your credit out, which in turns saves you money.

 

[s0ssos]

Originally posted by: josh0099

Originally posted by: s0ssos

Originally posted by: Alone
In my opinion, it shows a lack of control if you request a decrease. There's no logical reason to do so unless you think you can't control your spending habits.

what if you had your credit card with a billion in credit line, and some guy came over and kidnapped you. then he wanted you to buy him chips at the casino. for a billion dollars.
see, if you only had your little $1,000 credit line, you wouldn't have to worry about scenarios like this. you can just say, i only have a $1,000 credit line, i told the credit card issuer to never let me go over the limit. and the guy will say, oh, ok. we'll go find someone else

Yea since you heard about people making other people buy stuff with their credit cards...Oh wait no...Anyway why are people so paranoid about having big credit lines? If you don't spend it you don't pay for it its that simple. If someone steals your card you aren't going to pay for it. There are federal laws protecting you if someone steals your card, I think you are only really liable for like $20 or something small like that, but most credit card companies don't even make you pay the $20 that you are liable for. A lot of credit card companies have free alert systems, so if something looks out of the ordinary they call you and make sure its you and not someone else....So really no reason to ask for a decrease, as its just helping your credit out, which in turns saves you money.

it's actually $50. but a lot of companies have a $0 fraud liability thingy.

but all said, i don't see why people think it's such a big deal to put a limit. i mean, some of my friends have gone to using their check cards, cause they can see the money coming out directly. some people use cash. it helps one to spend less. and these are people who can afford to pay off their cc bill.

 

[MagicConch]

My father did this, but I figured the more credit i tie up in the one card I know about, the less chance of getting huge allowances in new cards from identity thiefs.

 

[sdifox]

Call CC company, tell them you want to cancel, they offer to drop limit, end of story. Fastest way to drop your credit limit.

 

[ungsunghero]

Do you have another credit card that you can use daily?

If so, and you're that worried about going out-of-control, start using that other card and bury your current one in your drawer, but don't adjust the credit limit on that card, or (worse) close it!