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Why would a CC lower your credit limit?

Established Contributor

Why would a CC lower your credit limit?

Out of curiousity, why would a CC lower the credit limit of a customer?  It hasn't happened to me, and I have spotless payment history, but I was searching the web and came across that possibility.  I'm wondering, how common is this practice?  Does anyone have any experience with it?  If so, how drasticly might they cut your limit?  And what are the reasons aside from poor payment history? 

Chase Freedom: $1500, Citi Diamond Preferred: $3000, Barclays: $3900, Chase Disney Visa: $1500, Chase Southwest Signature: $5000, Citi TY Preferred: $3000, Cap One Platinum: $1750, Cap One Platinum Rewards: $2500, Orchard Bank: $900, Kay Store Card: $6600, PayPal $2200
Message 1 of 19
18 REPLIES
Contributor

Re: Why would a CC lower your credit limit?

Many reasons. Lack of usage. Recent opening of new accounts elsewhere. The lender restructuring its risk profile, etc.

FICO 04 scores: 809 (EQ) 812 (EX) 818 (TU)

Amex Platinum NPSL - Citi HHonors Sig. $58k - BMW Ultimate $40k
Chase Sapphire Preferred $62k - Merrill Lynch + Signature $41k - USAA Rate Advantage $28k
NFCU Flagship Signature $50k - USAA Cash Rewards AMEX $28k
Citi Platinum Select / AAdvantage Signature $31k - Chase Amtrak Rewards World MC $41k

Message 2 of 19
Established Contributor

Re: Why would a CC lower your credit limit?

Okay...so I'm nervous.  I opened up a Citi and Chase card in June.  I also have Barclay Card with a high utilization, but I pay the bulk of it off every month.  My other CC's are Cap One and they are paid down, and I don't use them...nor do I care too.  However, I just financed some furniture and used my Citi card for the down payment...so that card will have high util until I pay it in two weeks.  So, could they really cut my CL for that?  I didn't even consider this as a possibility.  It seems like garbage if you ask me.  I haven't done anything wrong since I got those cards, and I have flawless payment history elsewhere.

Chase Freedom: $1500, Citi Diamond Preferred: $3000, Barclays: $3900, Chase Disney Visa: $1500, Chase Southwest Signature: $5000, Citi TY Preferred: $3000, Cap One Platinum: $1750, Cap One Platinum Rewards: $2500, Orchard Bank: $900, Kay Store Card: $6600, PayPal $2200
Message 3 of 19
Highlighted
Established Contributor

Re: Why would a CC lower your credit limit?

One more note...since Citi and Chase are both new, would they even be doing account sweeps before the 6 month mark to even consider something like this?

Chase Freedom: $1500, Citi Diamond Preferred: $3000, Barclays: $3900, Chase Disney Visa: $1500, Chase Southwest Signature: $5000, Citi TY Preferred: $3000, Cap One Platinum: $1750, Cap One Platinum Rewards: $2500, Orchard Bank: $900, Kay Store Card: $6600, PayPal $2200
Message 4 of 19
Valued Contributor

Re: Why would a CC lower your credit limit?

The only one that is inq sensitive is Barclays. But of your using it regularly I won't even think twice.

Unless you append like 4-5 cards at once since you got it.
Current: Discover Fico 709 3/15 Walmart Fico 743 4/15

Inquiries (24 Months): EQ 6 TU 1 EX 6 | Most Recent: 4/09/2015
Over 12 Months:9


2015 Goals:
Lower Utility
Earn Cash Back

Amex Zync(Unicorn)
Chase Freedom$1500
Discover IT$7,400
Citi DC $10,000
Citizens Mastercard$7,000
Message 5 of 19
Contributor

Re: Why would a CC lower your credit limit?


EaglesFan2006 wrote:

Okay...so I'm nervous.  I opened up a Citi and Chase card in June.  I also have Barclay Card with a high utilization, but I pay the bulk of it off every month.  My other CC's are Cap One and they are paid down, and I don't use them...nor do I care too.  However, I just financed some furniture and used my Citi card for the down payment...so that card will have high util until I pay it in two weeks.  So, could they really cut my CL for that?  I didn't even consider this as a possibility.  It seems like garbage if you ask me.  I haven't done anything wrong since I got those cards, and I have flawless payment history elsewhere.


I think that you may be worrying yourself to death for no reason. In the odd event that they decreased a limit, which doesn't happen as often as people think, you can always call in and usually get it restored unless your payment history has been bad (there or elsewhere).

 

FICO 04 scores: 809 (EQ) 812 (EX) 818 (TU)

Amex Platinum NPSL - Citi HHonors Sig. $58k - BMW Ultimate $40k
Chase Sapphire Preferred $62k - Merrill Lynch + Signature $41k - USAA Rate Advantage $28k
NFCU Flagship Signature $50k - USAA Cash Rewards AMEX $28k
Citi Platinum Select / AAdvantage Signature $31k - Chase Amtrak Rewards World MC $41k

Message 6 of 19
Established Contributor

Re: Why would a CC lower your credit limit?

I've heard that about Barclay...I'm more concerned with the other two.  But I figure the 6 month mark isnt until January, and at point I won't be as worried about util.  Does that make sense as far as those two checking accounts before then?

Chase Freedom: $1500, Citi Diamond Preferred: $3000, Barclays: $3900, Chase Disney Visa: $1500, Chase Southwest Signature: $5000, Citi TY Preferred: $3000, Cap One Platinum: $1750, Cap One Platinum Rewards: $2500, Orchard Bank: $900, Kay Store Card: $6600, PayPal $2200
Message 7 of 19
Valued Contributor

Re: Why would a CC lower your credit limit?

I wouldn't worry about citi or chase. Just keep doing what your doing.
Current: Discover Fico 709 3/15 Walmart Fico 743 4/15

Inquiries (24 Months): EQ 6 TU 1 EX 6 | Most Recent: 4/09/2015
Over 12 Months:9


2015 Goals:
Lower Utility
Earn Cash Back

Amex Zync(Unicorn)
Chase Freedom$1500
Discover IT$7,400
Citi DC $10,000
Citizens Mastercard$7,000
Message 8 of 19
Contributor

Re: Why would a CC lower your credit limit?


EaglesFan2006 wrote:

I've heard that about Barclay...I'm more concerned with the other two.  But I figure the 6 month mark isnt until January, and at point I won't be as worried about util.  Does that make sense as far as those two checking accounts before then?


Read previous comment, and try to chill out. You're going to give yourself a stroke.

 

As long as your utilization doesn't shoot up and STAY up, they could care less. They WANT you to use the cards. If you don't, they make no money. As long as you are utilizing and paying as you described above, I would be surprised if your limits don't increase. They'd certainly stand little chance of decreasing.

FICO 04 scores: 809 (EQ) 812 (EX) 818 (TU)

Amex Platinum NPSL - Citi HHonors Sig. $58k - BMW Ultimate $40k
Chase Sapphire Preferred $62k - Merrill Lynch + Signature $41k - USAA Rate Advantage $28k
NFCU Flagship Signature $50k - USAA Cash Rewards AMEX $28k
Citi Platinum Select / AAdvantage Signature $31k - Chase Amtrak Rewards World MC $41k

Message 9 of 19
Mega Contributor

Re: Why would a CC lower your credit limit?

I agree with Elcid, your worrying for nothing. Keep using your cards and making big payments and you'll be just fine.



EQ FICO 548 3/3/16
Message 10 of 19