Comments on: Why Are Credit Card Companies Lowering Your Credit Limits?

By: Ed

Ed — Mon, 23 Jan 2012 03:33:19 +0000

Bank of America just closed my credit account. It’s only $1500, but I just made a $1400 payment and the balance never goes that high – unless it’s Christmas. I’m pissed. I paid it off so I could use it. Now I don’t even have that! I am going to withdraw all my money from that bank and close everything. This is not fair, and so not cool. I am never late, never over, and have plenty of money in my accounts. Cash people. Lets use cash!!!

By: Karen

Karen — Mon, 09 Jan 2012 08:39:07 +0000

I have several cards but did not charge more that 40-50% of my credit limit on most of them (had about 2 cards that were charged to 80%). I have not used any of my cards since 2009, I pay more than the minimum on most of them, never been late & have even paid off 4 of my accounts. Since late 2009, one by one my creditors have lowered my credit limits on my accounts (Capital One went from a CL of $15k down to the $6K I owe) and they keep lowering the limits as I pay them down (Sears went from $5K, down to $3k, down to $2k, down to $500) so my credit score doesn’t have a chance of recovering! I made a deal with Citibank last year that I would not use my card for 12 months (not a problem – I wasn’t using it anyway) if they would not lower my credit limit – they agreed. When the 12 months was up, they lowered my $12K limit to the $4K I owe. When I called to complain, they said that they were well within their rights and that our previous agreement was over. Every bank I talk to cites their reason for lowering my limits is because my ratios are too high. My ratios are too high because they keep lowering my limits!!!! Not sure how to repair the damage these limit lowering attacks have done to my credit. I just keep paying my accounts and they just keep lowering my limits, not sure who’s gonna get to zero first…my credit limit, my FICO score, or my balance!! The race is on!

By: TL Cole

TL Cole — Sat, 31 Dec 2011 17:22:11 +0000

What BS! (But thank you for your thorough explanation) I’m out with friends and my ETrade Visa credit card was declined. Huh? This is a card I’ve had for nearly 10 years, never late, $10K limit, and usually about $1,000 a month in charges with I regularly pay off. So I call Etrade and am told that my credit limit has been lowered (to exactly the amount of my outstanding balance — how convenient for them). Oh, and also a letter has been mailed out explaining why.

So I immediately think credit fraud, get online and check my credit report with all 3 big guys. It’s good, nothing has changed — except for of course the part where my total balance has suddenly become my total credit line, which obviously lowers your score.

I call the not-so-friendly-folks at Etrade credit card division back to calmly explain that if this is not resolved, I am going to immediatlely move both mine and my husband’s IRA accounts, not to mention a Complete Savings account, and a brokerage account from Etrade to well, I don’t know who yet. But somebody who doesn’t crap on their loyal customers. I’ve always been a big fan of Etrade, to the point where I’ve recommended the online brokerage to friends and even my Mom. But now, I am one of their biggest BAD-MOUTHERS. I will tell anybody who will listen to RUN.

I DON’T CARE THAT THAT ETRADE BROKERAGE IS A SEPARATE DIVISION FROM EDTRADE CREDIT CARD! I go to one website to see all my accounts. And the credit card prominently displays the Etrade logo. Bottom line is that the Suits from both sides need to get together and determine what actions will help/hurt their overall bottom line.

This ridiculous and inconsiderate move is absolutely going to hurt theirs. I mean, what’s happened to common courtesy? AT THE VERY LEAST, they could have mailed out their “we’re reducing your limit for no reason” notifications IN ADVANCE of actually doing so. At least then I wouldn’t have monthly auto-bill subscriptions and services bouncing…

I’ll shut up now. But, people, please. Let’s not take this abuse. Tell everyone. And move your financial resources to a company that will respect you.

By: Matt

Matt — Wed, 21 Dec 2011 13:59:25 +0000

This is such BS…
It happended to me right before Christmas this year. I paid my Credit Card (PayPal Master Card) in full, i had always paid my bill on time and often paid at least $50-$100 more a month on the payment. In November i paid the entire bill (i had a balance of $1440 on a $10,000 card), PayPal after cashing my payment immediatley reduced my credit limit by 90%. Which of course snowballed my credit rating 30 points. The worst thing is i didnt know about this until i tried to use the card which led to a very embarrasing situation. This is an all out war on consumers. Now my other credit cards are doing the same thing because my debt to income ratio has ballooned. All of this started because of Paypal. They are ruining the lives of good people based on a computer algorithim, the human factor has been abolished. The computer says because i paid my bill in full this was an irratic fianancial decision and therfore cannot be trusted to have more money. To add insult to injury, i wanted to refinance my truck as the refi rates at my local bank were 2-3%, my own bank, with whom i have banked with for 18 years denied due to the recent drop in credit lines. I have had 2 mortgages, 1 home improvement loan and 3 auto loans through them and NEVER defaulted. I am so sick of this…and teh sad part is there is nothing we can do. Now i read that credit companies are basing decisions based on geographical real estate regions? What the hell does someone in a neighborhood down the road defaulting on his mortgage have to do with me paying my bills, why should i and my family be punished for somone elses lasck of financial savvy?

sorry folks rant over, im just so sick of this nonesense.

By: Beverlee

Beverlee — Tue, 20 Dec 2011 10:59:34 +0000

Me too. I have been a loyal Sears customer for over 30 years, and my mother was before that. I have bought all my appliances-washers, dryers, refrigerators, dishwashers, as well as clothes, tv’s, lawn mowers, rototillers from them. I had $400 balance on what I thought was a $9000 credit limit. We go to purchase a new washer and dryer for $2000 and the card is declined. I call and was told the credit line was reduced to $1000 last March because of debt to income ratio. They will absolutely not raise my limit to purchase the appliances. I pay on time and have paid off all of these purchases over the years. I was stunned. No wonder their sales are down and credit cards are being paid off–because the banks are tightening credit on good customers who would buy their products. It makes me feel like never setting foot in another Sears store again. Penny wise, pound foolish.

By: Jay

Jay — Sun, 11 Dec 2011 03:59:53 +0000

I was screwed over this afternoon by HSBC. I had just paid off the 400 balance and recently put just under $200 back on.
Never had any issues w/ this account. Maybe late 1-2 times in the 8+ yrs Ive had the account.
I went to purchase an item and it was declined. I thought that was impossible, My CL was 2900. I then called to find out it was reduced to $300 . This is Ridiculous!!
I can’t wait to lay into these Morons either tomorrow or monday.
Very Tempted to just drop the card.

By: Sheryl

Sheryl — Thu, 01 Dec 2011 08:31:28 +0000

Me too… Just like the rest of you. I carry a $700 balance on Home Depot card and it was lowered to $800 credit limit from $3000 and my Walmart card was lowered to 20 dollars over the $500 balance I have. I have a great job, own a home, pay my bills on time, pay more than the min due. And like the rest of you I am confused, hurt, embarrassed, angry and want to know what the hell is going on.

I hope we soon find out what the credit card companies seem to already know.

I also think I’m going to cancel these cards and just pay them off. That was a good idea I read from someone’s post here.

Take care everyone!

By: Anna

Anna — Sat, 19 Nov 2011 18:59:47 +0000

I just looked at my BofA credit card account and my credit has been dropped from 15,000 to $500! I have a credit score of 720 and have never missed a payment! I have a significant amount of cash in the bank (BofA) but I do owe a lot in credit cards as well, although, again, I’ve never missed a payment. I’m really upset over this as BofA is one of the 2 credit cards that I have kept and $500 credit is close to worthless.

By: Michael M.

Michael M. — Sat, 12 Nov 2011 23:13:18 +0000

I was flabbergasted today when I went to use my Sam’s Club Discover card and it was declined. I went to the ATM machine to check my balance (I knew it wasn’t over $5,000) in case I might be the victim of identity theft. I didn’t even have the $1.00 fee to pay for the ATM inquiry available. I called when I got home. They lowered my credit limit from $7,000 to $5,000 without warning. The rep I talked to and could barely understand finally transferred me to a supervisor. The supervisor had absolutely no information and was not at all helpful. All she said was that I will receive a letter outlining changes on my account. I was running a $6,000 balance 3 months ago and paid it in full. I have never been late on a payment and I have never maxed the card out. I am completely stunned by this. Alienating good customers is a really bad practice. I intend to pay off the balance this month. I will keep the account open but will never charge more than $100 on it again and will pay off within 30 days. I would cancel the account if I didn’t think it would hurt my credit score even more than it probably already has. I’ll be going back to American Express. I never had any issues with them.

By: Jason D

Jason D — Tue, 18 Oct 2011 21:48:38 +0000

HSBC just reduced my Best Buy card from 2,000 to 2 dollars!!! My previous balance was 775 so this is going to hit my credit hard since I do not have many open accounts(mortgage, other credit card, car loan). I have perfect credit and have not been late on any payments in the past 10 years. I was a personal banker so I understand the impact this will have on my credit and just about everything there is to know about a credit report. For reference my credit score is around 750 middle. This is complete BS, I pull my credit every month and I am curious about what my credit score’s will be next month. If this affects any of my other account’s I will be calling my attorney. Credit is such a scam today. This little game that HSBC is playing could cause my insurance rates and other account rates to increase. That is why it is corrupt ,and crap like this shouldn’t be allowed unless the consumer actually did miss payments significantly or is only paying the minimum payment each month concurrently.