@Anonymous wrote:
This is a certain amount of conjecture, but...
I'm sure that a bank has only a certain amount of total credit that it can offer (I mean total, across all of their card holders). They probably have a formula based on their total assets, and there's a number that they can't exceed. If that's true, then when one card holder gets a credit limit increase, then someone else needs to get a decrease.
Okay, that's probably an oversimplification. But it only makes sense that they want to achieve a certain level of credit utilization (on their end). If they only have so much to offer, they want that to be working for them, not just padding someone's FICO score.
So when they need to free up a few million dollars to open some new accounts or offer some credit limit increases, they look to see who's not using theirs. Then BOOM, you all go down to $1024.
Anyway, that's my educated guess... that it's really more about the bank's profits than it is about how they perceive your credit-worthiness.
In other words, it's not really your fault. It's more, "If you're not going to use it, we'll find someone who will."
+1
I've actually brought this up on other threads before as well. Folks tend to think of the banks as an 'unlimited' source of credit, but they do have to keep reserves on hand for the credit they extend. So, while they are able to extend tremendous amounts of credit across all accounts (collectively), there definitely is a limit.
It makes sense that when they need to rearrange things a bit, the first ones to be impacted will be folks with really large credit lines that aren't utilized. I have a feeling that once a need is demonstrated, they would likely restore the credit line, or at least raise it to a usable limit.
Just my 2¢.
