topic Re: Credit Limit in Credit Cards

Credit Limit

Anonymous — Sat, 31 Jan 2009 18:29:32 GMT

Is it possible that my credit card company will lower my credit limit? I have 10,000 credit limit and every month I have a balance of 50 so not even 1% dept to credit ratio in other word I use it for a very small amount only and I'm doing it for 5 months already. Thanks

Re: Credit Limit

Anonymous — Sat, 31 Jan 2009 18:32:52 GMT

Anything is possible, many card companies are reducing credit limits because "you arent using much of your available limit". If you can tell us who your credit card is through we can tell you how likely it is you might see your limit drop.

Re: Credit Limit

haulingthescoreup — Sat, 31 Jan 2009 18:36:15 GMT

And alternatively, they can lower it because they feel you're using too much of your limit!

Banks are having to reduce the amount of extended credit on their books, so they're doing CLD's with amazingly random reasons.

Re: Credit Limit

Anonymous — Sat, 31 Jan 2009 18:37:17 GMT

Thanks right now its wamu but on march it will become chase. on the bad side if they lower my credit limit I have a high balance of 7,000 so if they drop it to 5,000 or something it will look like I over the limit is it correct?

Re: Credit Limit

Anonymous — Sat, 31 Jan 2009 18:42:46 GMT

Yeah, but underwriters understand what happened, your not going to go 2K over the limit and still have the account open =P I dont know if chase will CLD you, you might see an APR jump though.

Re: Credit Limit

Anonymous — Sat, 31 Jan 2009 18:47:48 GMT

thanks a lot, I'm planning to close it before they lower my limit coz I don't want to have that situation.

Re: Credit Limit

Anonymous — Sat, 31 Jan 2009 18:50:15 GMT

Woah now I wouldnt do that! Your not going to sell your car because it might break down are ya? Were in bad times right now and no one is immune from AA for no apparant reason, but the times will change and I think many will get there limits back.. might be a few years though!

Re: Credit Limit

cobaltnv — Sat, 31 Jan 2009 19:14:18 GMT

How is closing your account better than the potential for a CLD? I would not close out the account without a very good reason--and IMO the possibility of a CLD is not a good reason.

@Anonymous wrote:
thanks a lot, I'm planning to close it before they lower my limit coz I don't want to have that situation.

Re: Credit Limit

Anonymous — Sat, 31 Jan 2009 19:14:22 GMT

Thaks.. but what are the negative effect if i close that account besides my dept to credit ratio will not be affected

because I dont have any dept to my other credit cards? Thanks a lot really help

Re: Credit Limit

cobaltnv — Sat, 31 Jan 2009 19:19:03 GMT

I am going to assume that there are other reasons you want to close this account. Is there some reason you want to close this account (other than the potential for a CLD)?

If you do not have credit card debt then a CLD is not going to hurt you credit score (or debt to credit ratio). Before closing a credit card be sure you read the first post in "closing credit cards". The thread may be found in the commonly requested threads post at the top of the main page.

@Anonymous wrote:
Thaks.. but what are the negative effect if i close that account besides my dept to credit ratio will not be affected
because I dont have any dept to my other credit cards? Thanks a lot really help

Re: Credit Limit

Anonymous — Sat, 31 Jan 2009 19:29:46 GMT

yes first my apr went up to 13% from 6% then the new program seems not to favorable but this card is been 5yrs

already cant find the first post regarding closing account, one more thing I have 10,000 credit limit and high balance

of 7,000 if they lower my score to 5,000 or so, it will look that I over my limit. thanks

Re: Credit Limit

Anonymous — Sat, 31 Jan 2009 20:01:25 GMT

You don't carry balances. You can call and ask them to lower the APR, if they won't, so what? Just don't start carrying a balance.

The other issue, as Fender already pointed out, is that it's not going to look like you've been over the limit. It may look like to you, but I can assure you that the important details are in your credit report and underwriters can see it. If you pull your full credit report, directly from the bureaus, you'll even be able to see what your monthly usage has been, and what your limits are/were at any given time. A CLD isn't going to hurt you in FICO scoring, or for underwriting purposes unless you were carrying a balance, or there are derogs that precipitated the CLD.

@Anonymous wrote:
yes first my apr went up to 13% from 6% then the new program seems not to favorable but this card is been 5yrs
already cant find the first post regarding closing account, one more thing I have 10,000 credit limit and high balance
of 7,000 if they lower my score to 5,000 or so, it will look that I over my limit. thanks

Re: Credit Limit

cobaltnv — Sat, 31 Jan 2009 20:25:00 GMT

@Anonymous wrote:

already cant find the first post regarding closing account, one more thing I have 10,000 credit limit and high balance
of 7,000 if they lower my score to 5,000 or so, it will look that I over my limit. thanks

The thread on "closing credit cards' can be found in the "helpful threads" post at the top of the main credit card page

As for your concern about looking over the limit--I agree with Lilmirth. Don't worry about it, it will not have any effect on your credit score or on how an underwriter looks at your file.

Message Edited by cobaltnv on 01-31-2009 12:25 PM

Re: Credit Limit

Anonymous — Sun, 01 Feb 2009 03:47:55 GMT

thanks a lot really help.... when you say underwritters thats the lenders right?

Re: Credit Limit

Anonymous — Sun, 01 Feb 2009 03:52:08 GMT

yes an underwriter assess the eligibility of a customer to receive their banks products.

@Anonymous wrote:
thanks a lot really help.... when you say underwritters thats the lenders right?