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Credit Limits Reduced after Asking for a Balance Transfer

New Contributor

Credit Limits Reduced after Asking for a Balance Transfer

I just received 2 letters, one from Chase decreasing my limit to my current balance, and one from First USA decreasing my credit limit from $11,700 to $500 and I have no balance.  Both reported information received from Experian.  Can they use this information if I can't get the scores? 

 

I've recently paid off 7 accounts and wanted to do a balance transfer from the zero balance account to split the balances between the zero balance account with a high balance account to decrease the interest rate and balance.  Reason sited was too many open accounts (I did not close any since it lowers the scores), balance too high compared to the credit limits (which is what the companies are doing, lowering the limits to the balances), and number of accounts in use (I just closed 7). 

 

What can I do?  When I call the companies, it sounds like they are reading from a script and will not increase the limits or lower the rates. 

 

750Lady

2010 Original Goal 750

Starting Score: EQ 1/2010, 699; EXP 12/09, 723; TRANS 11/09, 710
Current Score(Updated from tri-merge mtge 1/21/11): EQ 1/11, 729; EXP 1/11, 759; TRANS 1/11, 731
Goal Score: EQ 12/2011, 800; EXP 12/2011, 800; TRANS 12/2011, 800


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10 REPLIES
Frequent Contributor

Re: Credit Limits Reduced after Asking for a Balance Transfer

How many open accounts?  What is your util?  Why did you close 7 accounts?  Perhaps the closing of 7 accounts triggered some sort of concern.
I want PATIENCE...and I want it NOW
New Contributor

Re: Credit Limits Reduced after Asking for a Balance Transfer

I paid the 7 accounts, but did not close them for fear of my credit score going down.  I have 6 remaining accounts 4 near their limits because the credit card companies have lowered the limits to the balances.  The other two will be paid off by August.  My scores are Equifax 686; Experian 650 and Transunion 693. 
2010 Original Goal 750

Starting Score: EQ 1/2010, 699; EXP 12/09, 723; TRANS 11/09, 710
Current Score(Updated from tri-merge mtge 1/21/11): EQ 1/11, 729; EXP 1/11, 759; TRANS 1/11, 731
Goal Score: EQ 12/2011, 800; EXP 12/2011, 800; TRANS 12/2011, 800


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Frequent Contributor

Re: Credit Limits Reduced after Asking for a Balance Transfer

Are the 7 accounts in good standing and reporting as current?  What is total UTIL %?  What is your ultimate goal?  I would imagine you'lll need to pay the 4 accounts that are near "max" before the CCC's will extend more credit.
I want PATIENCE...and I want it NOW
New Contributor

Re: Credit Limits Reduced after Asking for a Balance Transfer

All of the accounts are in good standing, never late, and I pay more than the minimum balances.  When I get to around $3,000 below the limit, the limit is reduced again to the balance! 

750Lady

2010 Original Goal 750

Starting Score: EQ 1/2010, 699; EXP 12/09, 723; TRANS 11/09, 710
Current Score(Updated from tri-merge mtge 1/21/11): EQ 1/11, 729; EXP 1/11, 759; TRANS 1/11, 731
Goal Score: EQ 12/2011, 800; EXP 12/2011, 800; TRANS 12/2011, 800


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New Contributor

Re: Credit Limits Reduced after Asking for a Balance Transfer

By UTIL %, do you mean interest rate?  12.24, 13.99, 8.99, and 9.90.  By reducing the limits and increasing the rates, my scores are lowered from 700 and 700+. 

750Lady

2010 Original Goal 750

Starting Score: EQ 1/2010, 699; EXP 12/09, 723; TRANS 11/09, 710
Current Score(Updated from tri-merge mtge 1/21/11): EQ 1/11, 729; EXP 1/11, 759; TRANS 1/11, 731
Goal Score: EQ 12/2011, 800; EXP 12/2011, 800; TRANS 12/2011, 800


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Frequent Contributor

Re: Credit Limits Reduced after Asking for a Balance Transfer

By UTIL I mean what percentage of available credit lines are you using (i.e. 40%, 50%, etc)  The higher your UTIL, the greater risk seen by CCC.  Do you know what might have triggered Chase and First USA to take the AA?

 

Message Edited by illtakecreditforthat on 05-30-2009 10:34 PM
I want PATIENCE...and I want it NOW
New Contributor

Re: Credit Limits Reduced after Asking for a Balance Transfer

I was wanting to transfer $5,000 from the zero balance 1st USA account with a limit of $11,700 to one of the accounts which had a high balance to credit limit, to bring the balance down again from the ceiling.  By doing this I would reduce the payment, and hopefully the interest rate, and move the balance away from the credit limit.  The $5,000 would only be 1/4th of the limit to the 1st USA card.  It seems that 1st USA and Chase are affiliated because I received both letters the same day.

750Lady

2010 Original Goal 750

Starting Score: EQ 1/2010, 699; EXP 12/09, 723; TRANS 11/09, 710
Current Score(Updated from tri-merge mtge 1/21/11): EQ 1/11, 729; EXP 1/11, 759; TRANS 1/11, 731
Goal Score: EQ 12/2011, 800; EXP 12/2011, 800; TRANS 12/2011, 800


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Frequent Contributor

Re: Credit Limits Reduced after Asking for a Balance Transfer

First USA was a subsidiary of Bank One, which was acquired by JP Morgan Chase.  They are more than just affiliated; Chase owns First USA, which explains the simultaneous action by both CC's.  Perhaps, you should call Chase and attempt to consolidate the 2 cards into one with a higher CL and better terms.  A little recon can't hurt at this point.
I want PATIENCE...and I want it NOW
New Contributor

Re: Credit Limits Reduced after Asking for a Balance Transfer

Thanks for your explanations and advice.  I will try that and see what happens. 

750Lady...

2010 Original Goal 750

Starting Score: EQ 1/2010, 699; EXP 12/09, 723; TRANS 11/09, 710
Current Score(Updated from tri-merge mtge 1/21/11): EQ 1/11, 729; EXP 1/11, 759; TRANS 1/11, 731
Goal Score: EQ 12/2011, 800; EXP 12/2011, 800; TRANS 12/2011, 800


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