Recently 2 of my credit card limits have been lowered, Bank of America and AMEX. for example, let's say I have $9000.00 balance on my card but my limit was $13,000. So they lowered my credit limit to $10,000.00. I am not using this card for anything. the reason I have such high balance is for medical reasons. I have been paying the minimum amount. Same thing happened to my Amex. I am only using these 2 cards. Rest of my c.c have $0.00. So what I am worried about is that, this shows that I am about to max out my cc.
I have never been late on any payments and is this going to effect my credit score. I do not know what my score is, and never had any problem of not getting approved. This really worries me because I want to buy a car and am afraid that my score will be low and I'll get higher rates.
I have not used either cards am making payments.
Can someone explain me how this credit limit reduction is going to impact on my credit score?
Hi Hyeuhee, welcome to the forums!
Amex is notorious for what's called "chasing the balance" on CC accounts with high balances. As soon as a payment is made, they lower the CL to right above the new balance. When the CC is paid off, they will either close the account outright, or lower the CL to $500.
Bank of America also recently lowered limits on 2 of my CCs with them (always in good standing) ~$20,000. Banks are lowering their exposure in the tight credit environment.
The effects on your utilization can be somewhat detrimental to your CRs, as it seems like your CCs are always maxed out. To help mitigate this, I normally suggest to think about BT'ing your balance to another, non-weird CC, such as a credit union.