Credit access line vs. credit limit on credit score

[duragezic]

Recently Chase said they were going to upgrade my Chase Freedom card to a Chase Visa Signature card. It says I would keep the rewards program but get access to some new things. One of them is that there is no overlimit fee because there is no preset limit.

That is okay with me, and the other benefits of the new card, while not real important to me, could be pretty beneficial. Mainly the fact that I'd keep the current rewards but get some new things...

Sure, sign me up!

Except, I've read that due to not having a preset, standard credit limit, that the way your total revolving credit line may get reported such that it drops because of the apparent loss of a credit line. For me, that would be a lot because I only have one other card and it has a low limit. Instead of a current average revolving utilization of 5 to 10%, I'd be at 30 to 60% if the Chase credit line was not taken into account at all.

So, is this true of this new card, and would it be a big blow to my credit? I can opt out of this new card if I want to.

Seems like it could be a way for Chase to have less liability on their records, like a more creative way instead of just slashing credit lines in half like companies have been doing.

 

[duragezic]

TTT

 

[Suspicious-Teach8788]

Damn we really need Rossman for this huh?

Question though: What did you do to get upgraded? Do you spend a lot? Always pay on time? I've had my Chase Freedom card for about 8 months now. Always on time, always balances paid in full.

 

[DT4K]

Yes, it can damage your credit score.
Check out creditboards for more info.

Personally, I'm not a fan of these cards at all. It doesn't really mean there's no limit. It just means they can decide whenever they want to deny a purchase because it's too big. I prefer having a credit limit that I can see, rather than having to guess how much they'll let me spend.

 

[OCGuy]

Charge cards report your highest ever monthly balance as your limit.

 

[NoCreativity]

Originally posted by: DLeRium
Damn we really need Rossman for this huh?

Question though: What did you do to get upgraded? Do you spend a lot? Always pay on time? I've had my Chase Freedom card for about 8 months now. Always on time, always balances paid in full.

I got the same letter in the mail (except it was for a MC). It used to be my primary card until about two years ago. I haven't used the card in well over a year and have never carried a balance. I have had the account for about 7 years. Not sure this helps answer the question though.

 

[DT4K]

Originally posted by: OCguy
Charge cards report your highest ever monthly balance as your limit.

It's not a charge card.
It's a credit card with "no preset limit".

 

[duragezic]

Originally posted by: DLeRium
Damn we really need Rossman for this huh?

Question though: What did you do to get upgraded? Do you spend a lot? Always pay on time? I've had my Chase Freedom card for about 8 months now. Always on time, always balances paid in full.

Nothing special. I've had the card for 15 months but only used it regularly for 10 months. I always pay on time and in full. So it wouldn't surprise me if you get one of these in the next few months.

So if this credit line thing is true I will have to decline. But they could turn around and slash my credit line way down anyway, which is what it sounds like this thing would do on paper. So I can understand them trying this (if that is their intention) but for me it would just hurt too much because it makes up the vast majority of my revolving credit.

 

[kranky]

Based on your situation, I would keep the card that reports the limit.

 

[ponyo]

I got the same letter the other day. I had the same thought you did when I read the letter. Sounds like similar crap Capital One used to do by not reporting the limit and hurting your credit score. Easy way for Chase to reduce their exposure on books while screwing your credit score. Not that I'm surprised. Chase credit card portfolio is a ticking time bomb.

I'm just going to keep my card. I've plenty of other cards with large limits so this shouldn't hurt me. Plus I don't carry balances on my cards and don't see myself applying for any new credit anytime soon.

 

[bovinda]

This thread has been helpful. I was googling this very topic after getting one of those same letters two days ago. I think I will decline it as well - seems shady.

 

[Suspicious-Teach8788]

Wow I just realized after reading yesterday that the top 3 categories thing is gone for new cardholders. I never received anything in the mail about new terms though so hopefully I still get the old terms... I wonder how long this will last.