Chasing "balance"

[Anonymous]

The answer may be in those two words but just curious if I have a $10,000 credit line that I don't use has anyone ever seen the issuer lower the available credit for non use or very little use?

[morgacj2004]

Yes it does happen esp during hard economic times such as during the last recession. A lot of members on this forum including myself had CL reduced. Certain lenders are more prone to do this ie: AX than others ie; CO. AX reduced my CL on both of my cards while CO did not. Also some lenders have policy where they will cancel your acct for non-usage during a certain time frame. This is esp true with certain store cards. Zales did this to me after approx 2 yrs of non-use.

[ddemari]

I think that chasing a balance is a little different than non-activity. 

The banks that give you a $10k CL dont expect you to use it up, they want you to use it and pay it off. Then start the cycle again.

If you are being balance chased, this will happen for example; I owe Barclays a balance of $1,000.00 that I am  revolving, my limit is $2,000.00. Barclays reduces my limits to $1,000.00 and chases me as I pay off the balance.

Non-activity balance lowering or closing out can be avoided by making purchases every so often. 

[taxi818]

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@ddemari wrote:

I think that chasing a balance is a little different than non-activity. 

The banks that give you a $10k CL dont expect you to use it up, they want you to use it and pay it off. Then start the cycle again.

If you are being balance chased, this will happen for example; I owe Barclays a balance of $1,000.00 that I am  revolving, my limit is $2,000.00. Barclays reduces my limits to $1,000.00 and chases me as I pay off the balance.

Non-activity balance lowering or closing out can be avoided by making purchases every so often. 

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^^^^+1 exactly

[Anonymous]

Thanks guys, I don't need all of my cards they just have high limits here and there I'll put 400$ on a 10,000 card I just don't want them lowering my limit I typically pif each month after my balance reports. I just enjoy having high limits :/

[GoldSorata]

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@Anonymous wrote:
Thanks guys, I don't need all of my cards they just have high limits here and there I'll put 400$ on a 10,000 card I just don't want them lowering my limit I typically pif each month after my balance reports. I just enjoy having high limits :/

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You could just pay a netflix bill on a $10k CC and be fine. As long as you don't pose yourself as a risk to the creditor they should leave you alone. In fact, what they'd prob start doing in that case is send you more offers (BT offers, etc.) to entice you to use more of it.

[ddemari]

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@Anonymous wrote:
Thanks guys, I don't need all of my cards they just have high limits here and there I'll put 400$ on a 10,000 card I just don't want them lowering my limit I typically pif each month after my balance reports. I just enjoy having high limits :/

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Duh!! lol! We all love high limits

I think you are doing exactly what you should be doing. 

[SunriseEarth]

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@Anonymous wrote:
The answer may be in those two words but just curious if I have a $10,000 credit line that I don't use has anyone ever seen the issuer lower the available credit for non use or very little use?

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This is refered to as CLD (Credit Limit Decrease).   Some lenders/products are known for CLDs or account closures for lack of use.   You may want to use your CC periodically to help prevent this.  

"Balance chasing" is a very specific form of CLD.   This is a form of AA where a lender will CLD to an amount equal to or barely higher than the balance.  This is to prevent further spend.   Unfortunately, this also can raise UTIL quite a bit and lower scores, as a result.  

[Anonymous]

I've heard some horror stories of people's limit being lowered simply because they didn't use anything near their total available. Just wanted to be safe thanks guys

[ddemari]

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@Anonymous wrote:
I've heard some horror stories of people's limit being lowered simply because they didn't use anything near their total available. Just wanted to be safe thanks guys

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A story like that could have more to it that someone might not want to disclose. You can definitely have a card closed for non-activity. But, a bank is probably not going to reduce your credit limit on a card because you do not use all of that limit. Consumers who default often tend to use a magority of their credit extended to them. This causes creditors to red flag you. Banks tend to decrease your limit when they find you a risk, the decrease in limit comes from them not wanting to risk the possible loss of money on you. 

Banks rely a lot on data and analytics given to them through services and even when we buy items. The banks are trying to know who is a money maker for them and who is a loser to them in terms of default. You might see a bank increase your credit limit when you are not using more than say 10-20% of it because they want shift your thinking in order to use their card more. I