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Should You Ask Your Credit Card Company NOT To Raise Your Limit?

by Mr Credit Card

One of our readers, Lisa, had this question:

My card company just keeps increasing my credit limit- can I call and ask them not to increase it anymore without having that affecting my credit score? My cards are paid in full every month, and I will never charge the amount they have given me.
Thanks

Lisa,

There is only one reason that it will ever make sense to ask your credit card company to lower your limit (or to stop raising your limit.) The one good reason is that you feel like you will charge your cards up to the limit no matter how high or low that limit is.

In that situation, yes you will want to call your credit card company and ask that they stop raising your limit.

Be warned though, that it may still not work. Limit increases and decreases are usually automated decisions. The best any representative is going to be able to do for you is to put a note in your account that you would prefer not to have your limit raised.

That being said, if you have a good handle on how much you charge each month, limit increases are a huge benefit to your credit score.

Your debt to credit ratio (How much you have charged vs. how much credit you have available) makes up 30% of your credit score. So, the higher your limit and the lower your balance the faster your credit score will go up.

It is definitely in your favor to keep the higher limit and just charge your usual amount. Again though, if you are afraid you cannot do this definitely tell your credit card company that you don’t want any more limit increases. It’s never good financial sense to go deeper into debt just because more credit is offered.

Thanks for your question!

Another Reader, Diego, had this question:

I can’t seem to get it. I have an account with WAMU I’ve been calling for the last 3 days and nothing, I even spoke to a manager and nothing the only thing that they offer me was to waive $ 35 over the limit fee.

I don’t know what to do I’ve been paying the same amount for a year and I haven’t use that card in probably two. I don’t know what to do anymore , my current APR is 28% the manager also told me that she was going to put a note on my account that she waived those $35 which may make me ineligible for future offers lowering my APR or waiving any other fees.

I even told her I was getting laid off. Which is actually true any thoughts on this? thanks

Thanks for your question Diego. I am sorry that WaMu is giving you the runaround.

I do have three pieces of advice that may help you out.

  • Be persistent – It definitely pays to be the squeaky wheel when it comes to credit card companies. They are all capable of negotiating with you, you usually just have to get the right person.

    Just remember that this is your money, not theirs. Fight back – keep calling until someone helps you. I would try once in the early morning, and once in the evening just to get two different managers. If you reach someone you’ve already spoken with, explain to them that you are still not happy with the situation and that you are going to balance transfer your debt unless they help you out. Just don’t give up. Ask for the manager’s boss. Basically just be the pain in the rear that won’t go away, and they will negotiate with you. Be as polite as possible, but don’t give up!

  • Concerning being laid off – Call your credit card company and ask if your card has any sort of insurance that will keep you from having to make payments for a few months in case you get laid off. Better cards have this automatically, but some cards you have to pay a small monthly fee for the protection. The insurance itself will freeze your credit card payments for 3 – 6 months in the event that you are laid off. That means that you won’t have to make any payments to them while money is tight, and it will not be reported as late to the credit bureaus. Well worth having if you know you are facing a layoff.
  • If they still won’t work with you – Definitely consider balance transferring your debt. There are tons of low interest balance transfer options out there. If you have good credit, definitely don’t let WaMu charge you an insane amount of interest and run you around over removing fees! They may not value your money, but I know you do! Get the best deal you can, and if you get a new card, make sure you check on the layoff insurance for that card too.

    • Hope this helps!
    Mr. CC

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    This entry was posted on Tuesday, January 13th, 2009 at 16:41 and is filed under Reader's FAQ. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

    One Response to “Should You Ask Your Credit Card Company NOT To Raise Your Limit?”

    1. Credit Score Blogg Says:
      January 16th, 2009 at 05:30

      [...] Should You Ask Your Credit Card Company NOT To Raise Your Limit … [...]

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