Why was my credit limit lowered AGAIN?? Update post 13.

2082 Views 27 Replies 23 Participants Last post by turtlewomyn, Apr 14, 2009

minkajane

Discussion Starter · Apr 11, 2009

The credit limit on my AmEx was just lowered for the second time in a year. I have made all my payments on time, always more than the minimums. I just made an extra payment of $900 LAST WEEK. I just made my monthly payment ($45 over minimum) YESTERDAY. And today I got a notice that they were lowering my minimum again. Last year, it was $5,000. Now it's down to $3,700. I'm working so hard to patch up my credit since XH gave me a bad mark by not paying a credit card that he was supposed to get my name off of.

: Now all that work I've done is worthless because my balance to available credit ratio is high again.

Why would they be lowering my credit limit again when it's obvious that I'm making a sincere effort to pay off my debt? I'm going to call and see if I can get it increased, but this whole thing sucks. Maybe it's because I'm not using the card (haven't in over a year), so they assume I don't need the credit? Would it help if I charged $10 or something every month to keep my card active?

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Denvergirlie

· #2 · Apr 11, 2009

It more than likely has nothing to do with you the person. CC companies are doing this across the board, basically trying to limit their liability.

Sounds like they are chasing the balance on your account. I know I have a Discover card, no balance, and they just jacked up the interest rate to 19%. I really don't care as I don't carry a balance.

So the answer to your question of "Why was my credit limit lowered again?" is because they can.

Igraine

· #3 · Apr 11, 2009

I heard a story on NPR about this. I can't find it though.

:

Since they have less money to loan due to the crashing market and reduced revenue, they are reducing people's limits. They are also concerned that with the job loss, they want to reduce their level of risk by reducing customers' credit limits.

http://www.merchantglossary.com/indu...dit-limits/523

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alegna

· #4 · Apr 11, 2009

Probably because you're paying it off and not using it.

-Angela

velochic

· #5 · Apr 11, 2009

Quote:

Originally Posted by alegna

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Probably because you're paying it off and not using it.

-Angela

I doubt that that is it. We have no debt at all and over 100K in credit card limits. We pay off our cards every month, using them only to get the points for the purchases, and we have had neither credit limit reductions nor APR increases. I have one card that has a 40K limit and I use it about 2 times a year (our only Mastercard). No changes on that card.

It's probably just the credit card company and their own fiscal health. If they are floundering, they pass it on to the consumer.

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time4another

· #6 · Apr 11, 2009

Wanna hear something more whacky....

2 weeks ago got an offer for 0% transfer for 12 months from Household bank. BoA jacked up my interest rate this week (which I opted out of btw).

2 months ago Amex lowered DH's limit. It was increased again last week. This week he got the same BoA notice I did.

2 months ago our Home Depot account limit was raised...

This credit market is seriously manic-depressive! I think the cc companies are doing it just because they can...

lolar2

· #7 · Apr 12, 2009

I read that American Express is lowering most people's credit limits, across the board. Because they can, as a pp said.

cristina47454

· #8 · Apr 12, 2009

B of A is constantly doing this to me. It's infuriating! We're snowballing our debt and BofA is first on the list. I"ve been throwing $500-$750/mo at it. And everytime I call about an issue, they lower my limit to right above my balance. I feel like I'm being punished for my efforts! HATE THEM.

sanguine_speed

· #9 · Apr 12, 2009

My bank just recently decreased my cashback limit (not holding cheques) from $1000 to $200 for no reason related to me personally. It was a bit ironic, as it happened just the day before I went in to request an increase to$2000 (I didn't know they'd decreased it the day before). Frustrating as heck.

KatWrangler

· #10 · Apr 12, 2009

Its industry wide. They are tightening up available credit.

:

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p1gg1e

· #11 · Apr 12, 2009

We keep getting ours raised...we dont like it LOL

If your worried about buying a house you can always have it under written , you don't have to have a great credit score.

onlygirls

· #12 · Apr 12, 2009

Many people have no jobs or hours cut so they are supplementing thier income with credit. Makes sense for the CC companies to reduce the amount people can borrow right now.

minkajane

Discussion Starter · #13 · Apr 12, 2009

I called AmEx today to find out why they'd reduced my limit. The man I spoke to said that even though my average payment over the last six months has been more than TWICE the minimum, they still consider it a small payment and have lowered my credit limit because of this, plus my "high level of debt" (student loans). I think this is total bull****. I said as much and decided to cancel my account. I do not want to do business with a company which is going to punish someone for seeking an education, considers payments more than twice the minimum to be small, and lowers the credit limit of a customer in good standing twice in a year. I have another card for emergencies and I don't need this crap.

oneKnight

· #14 · Apr 12, 2009

Discover card keeps raising my limit, and I don't think they've raised my rates.
They offer high interest rates comperably, but of all the cards I have ever had, Discover was my first and is STILL my favorite.

I've never heard even one good word about American Express, which is why I never accepted any of their card offers.
Good for you for telling them off. Good luck paying off your other debts

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ChristyMarie

· #15 · Apr 12, 2009

Quote:

Originally Posted by minkajane

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I called AmEx today to find out why they'd reduced my limit. The man I spoke to said that even though my average payment over the last six months has been more than TWICE the minimum, they still consider it a small payment and have lowered my credit limit because of this, plus my "high level of debt" (student loans). I think this is total bull****. I said as much and decided to cancel my account. I do not want to do business with a company which is going to punish someone for seeking an education, considers payments more than twice the minimum to be small, and lowers the credit limit of a customer in good standing twice in a year. I have another card for emergencies and I don't need this crap.

Wait, is this a standard AmEx card? Because you are supposed to pay that off each month. Or is this their newer flexible payment card?

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cristina47454

· #16 · Apr 12, 2009

I know how infuriating it is, but don't cut off your nose to spite your face. Keep the account open - if you close it you might be hurting your credit score more than you realize, esp if it's a card that has a long history.

Ellien C

· #17 · Apr 12, 2009

I think you are wise to stop using the account. Whether you close it or not is up to you. Have you stopped charging on the card? You aren't using it for living expenses, right?

Delicateflower

· #18 · Apr 12, 2009

Quote:

Originally Posted by cristina47454

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I know how infuriating it is, but don't cut off your nose to spite your face. Keep the account open - if you close it you might be hurting your credit score more than you realize, esp if it's a card that has a long history.

Only if the OP is seeking a mortgage in the next year or two. otherwise why pay their really high annual fee for no benefit and reward bad behavior on the company's part.

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velochic

· #19 · Apr 12, 2009

Quote:

Originally Posted by Delicateflower

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Only if the OP is seeking a mortgage in the next year or two. otherwise why pay their really high annual fee for no benefit and reward bad behavior on the company's part.

Actually, your credit score affects all aspects of life. Perhaps not all people understand and that is why so many people are having troubles in several areas, but your credit score affects even your insurance rate, car loan rate, rental rate, even employment worthiness.

Whether one considers it to be right or wrong, our credit scores affect all aspects of our financial lives because it proves our credit-worthiness.

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minkajane

Discussion Starter · #20 · Apr 12, 2009

Quote:

Originally Posted by ChristyMarie

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Wait, is this a standard AmEx card? Because you are supposed to pay that off each month. Or is this their newer flexible payment card?

This was an AmEx Blue card. I know you're "supposed" to pay off credit cards every month, but if people could afford to pay for something at the end of the month, they wouldn't put it on the credit card, KWIM? I've been working really hard the past two years to build up my credit and I haven't used this card in a long time.

I may be coming into a bit of money next month, which will be more than enough to pay off this card completely, which will be good. I've only got one bad mark on my credit, which is the card XH defaulted on and I'm working on getting that removed from credit because I have a court order that says I'm not responsible for it and he finally paid it off anyway. So I'm not terribly worried about the effect closing the card will have on my credit.

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