@Anonymous wrote:Just noticed today that my CL went from $7000 to $950. Never a late and highest util ever on it was 13% only.
Hmmm, Lets do the math.
13% of $7000 is $910.
The most that you ever borrowed was $910.
105% of $910 is $955.
It seems that the bank might only be willing to lend you the amount that you have actually borrowed and paid back in the past.
I am sure the bank is aware of the utilization hit that is caused by CLDs. The bank is well aware that paying in full before the statement drops is the only way for the consumer to avoid a credit score hit with monthly charges that approach 95% utilization.
Maybe HSBC wants to motivate people to use their credit cards as non revolving "charge cards" that get PIFed even before the bill is mailed out.
They might even be trying to get the consumer to prepay the anticipated monthly charges that will cause the account to go over the credit limit. That way the card will be used as a debit card instead of a charge card. 
I wonder if forcing the consumer to use revolving credit cards as either charge cards or debit cards is a possibility as credit gets tighter and tighter in the future? 
Then again maybe some banks do read these forums and realize that many people PIF before the statement drops to keep their credit scores as high as possible.
Banks probably realize that allowing high unused credit limits allows the consumer to heavily use competitor's "rewards" cards while charging only a pack of gum on their high limit non rewards cards. Those banks are not getting any revenue from cards in a sock drawer. Those cards are only going to see high usage when the consumer needs money after the rewards cards are maxed out.
The banks might be jumping to the conclusion that they only have risk without revenue on some of their higher limit credit cards.
This is one of the reasons that I have always tried to have 50% utility at least once on all of my tradelines. 0% BTs have been great for that purpose. I always thought that the highest amount that was ever borrowed must be more significant than most people think. The amount is recorded on all credit reports. We almost never discuss how that amount might be used in scoring or determining people's credit limits. 
The problem is that they don't accept preemptive payments, at least not through their online payment system and that means you can only pay up to the amount they show as the current balance, regardless of how much they show pending, and they don't allow more than a certain number of payments in a given period, so it can't be used to double and triple up and pay more than balance that way either, trust me I have fought with them over this for years and no budge.
Banks probably realize that allowing high unused credit limits allows the consumer to heavily use competitor's "rewards" cards while charging only a pack of gum on their high limit non rewards cards. Those banks are not getting any revenue from cards in a sock drawer. Those cards are only going to see high usage when the consumer needs money after the rewards cards are maxed out.
The banks might be jumping to the conclusion that they only have risk without revenue on some of their higher limit credit cards.
This is one of the reasons that I have always tried to have 50% utility at least once on all of my tradelines. 0% BTs have been great for that purpose. I always thought that the highest amount that was ever borrowed must be more significant than most people think. The amount is recorded on all credit reports. We almost never discuss how that amount might be used in scoring or determining people's credit limits.
Good points! The only comonality I see in this thread is that people with low utilization on their cards got hit the hardest! It is a catch 22 where FICO looks for low utilizations on your cards, but it looks like some banks are rescinding their credit lines for just that, HSBC and GEMB seems to be notorious for this. I got slashed by both this week, but hardest by cards with lowest balances and the most available credit. It is quite hard to sustain any type of decent utilization when every few months, GEMB takes 500-1200 of my credit line, but good riddance to them!
I don't know what is going on with HSBC. I'm reading about CLD across the board and refusal to waive AFs. I've had GEMB close one card I haven't touched in two years and cut the limit on another I make a small purchase on every month. I've been wanting to call HSBC and actaully request a CLI but have been so afraid that they would decrease instead. My husband and I have each had an HSBC card for approx. 3 years now. There were actually the first cards we got following a BK in 2004. They had AF of $59 and limits of $500. Had to start somewhere right? Well, in the mail yesterday we each had a letter from Household. I thought, uh oh this it is, what did they cut my line to? I open my husband's first and it states that his annual fee has been reduced to $39 because of his excellent history with them. Okay, so now I had a little hope, I opened my letter. To my utter amazement they increased my credit line to $700 and reduced my af to $39 (I didn't even ask for it). My hubby and I have the same exact tract record with HSBC. Applied at the same time, same billing cycle, I even schedule the payments online for the same time. I'm not complaining or anything but what the heck is HSBC doing?
@kjm79 wrote:
I don't know what is going on with HSBC. I'm reading about CLD across the board and refusal to waive AFs. I've had GEMB close one card I haven't touched in two years and cut the limit on another I make a small purchase on every month. I've been wanting to call HSBC and actaully request a CLI but have been so afraid that they would decrease instead. My husband and I have each had an HSBC card for approx. 3 years now. There were actually the first cards we got following a BK in 2004. They had AF of $59 and limits of $500. Had to start somewhere right? Well, in the mail yesterday we each had a letter from Household. I thought, uh oh this it is, what did they cut my line to? I open my husband's first and it states that his annual fee has been reduced to $39 because of his excellent history with them. Okay, so now I had a little hope, I opened my letter. To my utter amazement they increased my credit line to $700 and reduced my af to $39 (I didn't even ask for it). My hubby and I have the same exact tract record with HSBC. Applied at the same time, same billing cycle, I even schedule the payments online for the same time. I'm not complaining or anything but what the heck is HSBC doing?
Mind if I chime in the lowered AF has happened to a couple others too recently and its because they are trying to make it less likely that you will call and ask them to waive it if you feel they did you a favor and honored you with an automatic lowering. Its bull and if you want to pay the AF, its a good deal but otherwise I would probably walk away willingly and not wait for them to jerk you around like they have others. HSBC is over extended, the bought a few in trouble companies thinking they have money and can cover it but its all coming down around them because they don't qualify for TARP (aka financial stimulus) becaue they are not US based and only have a holding company in the US and on top of that the Asian market is taking a nose dive too and stick to American policy we instituted is making it further difficult for them. So they are shoring up finances and pulling back to ensure they have enough money and this way they know how much each person can cover for sure if they had to call it in. My view on this is that they are alienating TOO many people to survive a comeback when things get better and they are being very very shortsighted. Especailly screwing with the CLD of good customers, high score customers and those who can afford to walk away from them. Ultimately whoever is making their decision is going to be ousted and they will regret this but in the meantime, there is just scrambling and making bad moves.