Why does my credit card limit keep reducing??

[JMapleton]

That's incredible. The annual fee alone is 50% of the limit there. Are they just banking that the cardholder is as stupid as they are financially irresponsible?

Who knows. I know they scared away a lot of customers.

Meanwhile, I'm a 20 something with less than 5 years of revolving credit history who just got my green card 2 months ago and blew $2k in the first 2 months without a hitch. It doesn't make sense.

 

[alfa147x]

Weird just opened a Banana Republic card, I'm 19 with little credit history

My limit: $1900

 

[drebo]

I have well over $20k between my two credit cards. One (Citibank) got hiked up to a 20% rate, the other (USAA) is still at 11%. You can guess which one I use.

 

[allthatisman]

Thank Obama and Congress. This was predicted because of the "consumer protection" bill.

Umm... this started happening before Obama was even elected, so try again. Ask me how I know...

 

[KMFJD]

Justa stupid quick question here, why would your credit score lower by cancelling your credit card?

/Spidey do you check underneath your bed at night to make sure Obama isn't underneath it waiting to kill you?

 

[kranky]

Justa stupid quick question here, why would your credit score lower by cancelling your credit card?

It MAY end up lower. A large part of your score is the % of available credit in use.

If the total $ of available credit drops, and the $ amount in use stays the same, the % of credit in use will go up, and that could hurt your score.

Practically, though, an increase in use of credit from 2% to 4% won't matter to your score. But going from 10% to 40% sure will. You can see how your score could easily be affected if banks cut the amount of credit available to you.

 

[Uppsala9496]

My Chase card went from $8,000 to $15,000 a few months ago. Not sure if that is because I have all of my banking (2 checking, 2 savings, mortgage and old car loan) with Chase or not.
Still kept the interest at 8.99% too.

 

[puffff]

My CC limits have gone up. But probably because I'm 'profitable'. I spend a lot overseas and my issuer gets all those foreign transaction fees.

 

[stag3]

same here, i've gone from 10k to 1k on my oldest card. (chase)
pif every month, never over, never carry a balance. they didn't want
my business anymore so i closed it. when i called to ask. they said
since i only charge ~600-700 a month anyways, there was no
point in having a 10k limit. doesn't really affect me other than
earning reward points on large purchases. i'll just use my other cards
now.

they prefer customers who carry a large balance every month, but
to me that is a$$ backwards, those are the people who are higher risk
to default, not those of us who pif. they still make money on the
transactions we do.

 

[nick1985]

pay your bills

 

[lurk3r]

Ya, my score confused me to, basically I'm a Canadian with very little US credit history, even though I've been working here for 10 years. I see alot of the same comments on my report, and I just cancelled my oldest account (Bank of America), applied for the costco amex and walked out of the store in an hour with a $5000 limit, charged around $4k on it and my score jumped 50 points.

 

[nick1985]

Ya, my score confused me to, basically I'm a Canadian with very little US credit history, even though I've been working here for 10 years. I see alot of the same comments on my report, and I just cancelled my oldest account (Bank of America), applied for the costco amex and walked out of the store in an hour with a $5000 limit, charged around $4k on it and my score jumped 50 points.

Using that much of your available credit isnt a good thing iirc

 

[lurk3r]

Using that much of your available credit isnt a good thing iirc

It'll be paid in full on the due date, I needed a new computer, bought some furniture, paid the utilities, and the new cannon 6 axis image stabilization lens, the comment was just that it seem to raise my rating when it should not have ...

 

[nick1985]

It'll be paid in full on the due date, I needed a new computer, bought some furniture, paid the utilities, and the new cannon 6 axis image stabilization lens, the comment was just that it seem to raise my rating when it should not have ...

Doesnt matter if its paid in full or not. IIRC....

 

[Svnla]

Wow, from 8K to 300, what can you do with a $300 credit line?

OP, go to https://www.annualcreditreport.com/cra/index.jsp and check your 3 reports to be sure everything is up and up. It is free and legit site.

Everyone else, go here http://articles.moneycentral.msn.com/Banking/YourCreditRating/YourCreditRating.aspx
and read to understand how best to handle credit.

 

[dullard]

I don't know what the first one in the list means. I'm not accumulating debt currently. The 2nd one makes no sense as I've never been late. The third one can't be right. I carry no balance forward month to month. The 4th one only makes sense if you look at the fact that they keep hacking my limit, but again the balance is always 0. WTF gives??? I have a 740 credit rating, and a mountain of student loans, but other than that I have 0 credit card debt.

Do you use your credit cards? If so, your balance isn't $0. If your balance was $0, then you aren't using your credit cards. There are two completely different balances to remember. One balance is the current amount of money you owe them (that is, if they sent a bill today, how big would the bill be?). If you use your credit card, this is NOT $0. This is the balance they are talking about in their reasons to lower your credit limit. The second balance is how much of the last bill did you pay. You say you pay your bills in full, thus this second balance is $0. But, that second balance is used ONLY to calculate interest they charge ($0 in your case). The first non-zero balance is used for absolutely everything else.

If this was your main credit card, then it is a self-fulfilling problem. Suppose your typical balance is $500. Remember this is how much you owe at the moment, not what the last bill was and it has nothing to do with how much you paid on the last bill. Then, your balance to credit limit was $1000 / $8000 = 6.25%. 6.25% is perfectly fine and normal, but banks started getting scared 2 years ago and started cutting limits. Suddenly your ratio increased to 8.3% when they cut your limit. Then it sent to 50% when they cut again. Now you were in big trouble, a 50% utilization is the death signal for credit card companies. They will just keep cutting until you stop using the card.

I'd check your credit report if I were you. There may be an error, a stolen identity, etc. That will help explain some of the unknown problems (such as a deliquency or balances that are falsely being attributed to you).

Finally, you identified one major potential problem in your OP "a mountain of student loans". Student loans are in your credit report. They still count against you, despite being a better kind of debt. Also, they are easy to go deliquent if you aren't on an automatic payment program. One misfiled piece of paper and suddenly credit card companies think you should be paying the bill and you aren't. You might want to rethink that mountain of debt.

 

[kami333]

wow, I thought I set the record by getting reduced from 10k to 4k on my AMEX...seems like a drop in the bucket compared to some of the shit here.

I had two cards at Amex that were at $24.9k ($49.8k total) that were both closed last year, also Discover closed my $10k limit card. My Ikea credit card (GE Money Bank) got cut from $2000 to $124 (not sure what they expect me to do with $124?). Though interestingly enough BoA, Chase and Citi have kept raising my limits. And I'm small potatoes compared to some of the posts I've read, some people have lost hundreds of thousands of dollars in credit card lines.

Thank Obama and Congress. This was predicted because of the "consumer protection" bill.

It was happening before the bill. The credit card companies are correcting (or over-correcting) for the fact that for the last couple years up until late 2007 they were giving out ridiculous credit lines without any real review, pretty much mirroring mortgages. For example Amex was pretty notorious for allowing credit limit increases up to about $24.9k per card with only a soft pull on your credit and self reported household income, it was only when you tried to go beyond 25k that they would either request supporting documents or conduct a full financial review. Probably explains why after fall of 2008 they've been very stingy and have been aggressively closing accounts, they were even offering money for people to close their accounts.

 

[radioouman]

lol @ credit cards.

 

[Zargon]

lol @ credit cards.

...?

 

[nick1985]

lol @ credit cards.

Smart people use them. Are you smart or dumb?

 

[Anubis]

Smart people use them. Are you smart or dumb?

im about to use mine to buy a 50in plasma TV

 

[yh125d]

I got a $500 card from USAA when I was 18. Now I'm nearly 20 and it's still $500. I could probably get it upped if I requested it but I don't wanna get turned down :S

 

[MrMatt]

The first one means your revolving credit debt on all your cards is too high compared to your available revolving credit.

Either you are in more debt than you realize or your credit report is messed up. Check your credit report.

Credit card debt? Or does student loan debt count as well?

What card?

It's a Macy's store visa. I use it for the discounts, but haven't used it in almost a year at this point. My other credit card limits haven't changed one bit.

 

[MrMatt]

Thank you for the replies; I have checked my credit report, nothing fishy on there. The card in question has not been used in bout 6 months. Hasn't even left my dresser drawer. Before that I never had more than several hundred bucks on it, payed off by due date.

 

[MrMatt]

Finally, you identified one major potential problem in your OP "a mountain of student loans". Student loans are in your credit report. They still count against you, despite being a better kind of debt. Also, they are easy to go deliquent if you aren't on an automatic payment program. One misfiled piece of paper and suddenly credit card companies think you should be paying the bill and you aren't. You might want to rethink that mountain of debt.

ah good to know. As for rethinking it: I would if I could my friend!