topic Re: Discover lowered credit limit in Credit Cards

Discover lowered credit limit

Anonymous — Sun, 17 Nov 2019 10:51:52 GMT

I recently got a consolidation loan and paid off all credit cards, total around $7k, not all have reported yet the zero balance. My utilization was pretty high, above 80%, but essentially is now 0, but since everyone hasn't reported the last payment, it is still around 36%. My credit score has gone from 597 to 660 just based on the reporting that has been done. I have late payments and paid collections from 2015 at the end of an unemployment stint.

Discover was nearly maxed out at about 1450 with a 1500 credit limit. I logged onto my account today and discover my credit limit went from 1500 to 500. So I pay off the account to a zero balance and they decrease my credit?

A month ago my utilization was higher and now its lower, I pay the card off, they lower the limit. I called customer support and she said they usually notify you and also reviewed my account and couldn't find a reason why. She gave me a different number to call during business hours during the week so I will call then.

Re: Discover lowered credit limit

Anonymous — Sun, 17 Nov 2019 11:15:28 GMT

Unfortunately when you keep a card at a high balance for awhile, once you pay it off the lender sometimes will cut the limit to what they deem more acceptable risk.

In the case of Discover, the good news is that they don't tend to keep you in the naughty corner for very long. With regular usage and payment in full for a few months, they will likely restore that limit and beyond. You can ask for a credit limit increase any time you wish online. It's just a soft pull so no hit to your credit.

I would be on the lookout for more lenders to do the same if they have been maxed out for awhile or they don't like your new DTI when saddled with the new loan. Just know that doing what's best for your wallet will always trump some loss of credit.

Re: Discover lowered credit limit

Anonymous — Sun, 17 Nov 2019 12:47:08 GMT

So were they just waiting for me to pay off some to lower the limit? I'm glad they didn't lower when my utilization was high.

My plan us to do what you said, use it for small things and pay in full each month.

Re: Discover lowered credit limit

radfam — Sun, 17 Nov 2019 13:02:21 GMT

Discover did something similar to me once. I was at 88% utl. They didn’t drop it in one whack, but did balance chase me a little as I was paying it off. Cut my $2400 CL down to $1600. Maybe six months later, with heavy usage and big payments every time, they bumped it back to $2400. Now up to $6200 not even a year later than that. Try to not be discouraged OP, it happens but it’s recoverable most of the time. Standard YMMV.

Re: Discover lowered credit limit

Anonymous — Sun, 17 Nov 2019 14:50:51 GMT

@Anonymous wrote:
So were they just waiting for me to pay off some to lower the limit? I'm glad they didn't lower when my utilization was high.

My plan us to do what you said, use it for small things and pay in full each month.

Yeah Discover tends to do one big cut after they have been paid where a lot of banks will cut your limit every time you make a payment, keeping you maxed until you have paid in full.

If you use the card and pay in full, you'll be well past that initial limit in no time.

Re: Discover lowered credit limit

Anonymous — Sun, 17 Nov 2019 14:51:49 GMT

@radfam wrote:
Discover did something similar to me once. I was at 88% utl. They didn’t drop it in one whack, but did balance chase me a little as I was paying it off. Cut my $2400 CL down to $1600. Maybe six months later, with heavy usage and big payments every time, they bumped it back to $2400. Now up to $6200 not even a year later than that. Try to not be discouraged OP, it happens but it’s recoverable most of the time. Standard YMMV.

Interesting. Disco isn't usually thought of as one who balance chases I thought.

They are certainly good about restoring the limits though.

Re: Discover lowered credit limit

radfam — Mon, 18 Nov 2019 15:51:43 GMT

I guess "balance chase" wasn't the appropriate phrase. Disco lowered my CL while I was paying down a high utilization.

Re: Discover lowered credit limit

satio — Mon, 18 Nov 2019 16:33:58 GMT

At least they did not close your account altogether.... and like others have said your CL will likely see a recovery over time.

I had an account opened in 1990. I carried a high balance for years through all my financial struggles which started in 2014. I hovered at 80-90% utilization at 29.99% interest and paid them religiously every month along with one other USAA CC account I was intentional to maintain while I had to let others go to charge off.

My financial recovery came full circle in 2018 and was finally able to get both accounts to 0 balance and keep them there.

After all that, Discover comes along in May 2019 and closes my account altogether after 19 years. FICO scores were low 600s at the time as I was still rebuilding.

Bam!

Upon our most recent annual review we have decided we no longer want you as a customer.

Re: Discover lowered credit limit

Anonymous — Tue, 19 Nov 2019 01:07:41 GMT

Just before my credit troubles, I had several almost maxed out cards alwasy paying just oier the minimum. Back then though it didin't seem like they were as cautious as they are now. At least the banks i had, because they kept increasing my limits. Now if my troubles hadn't happned this would have been a good thing, unfortunately it simply enabled me in my time of hardship.

Fast forward to now, and I'm very proactive about keeping utilization low as possible if a balance is needed. Otherwise most of my cards are at zero.

It seems that so mannay people are genuinely surprised/upset at CLD's or closures over being maxed out for a long time and only paying the minimums. I'm honestly surprised their surprised. How is it a shocker?

Would you continue to loan your friend Money while never being repaid, or very small amounts whenever it suited them?

Re: Discover lowered credit limit

Anonymous — Tue, 19 Nov 2019 02:47:01 GMT

I paid more than the minimum, not a lot more, but it was and slowly paying it down, but then I just paid it all off and had a zero balance. I'm surprised they waited until I paid it off, why not just lower it as I was lowering my balance?

Re: Discover lowered credit limit

OmarGB9 — Tue, 19 Nov 2019 22:27:05 GMT

Banks work in mysterious ways. Good thing is, though, it's Discover, so they should restore your limit in due time (and possibly give you more) with responsible use (not that you weren't responsible before, but just general rule of thumb with any lender) and PIF as much as possible.

Re: Discover lowered credit limit

Remedios — Tue, 19 Nov 2019 23:28:44 GMT

@Anonymous wrote:
I paid more than the minimum, not a lot more, but it was and slowly paying it down, but then I just paid it all off and had a zero balance. I'm surprised they waited until I paid it off, why not just lower it as I was lowering my balance?

Hi and welcome

It's because they want to make sure your financial issues are behind you. Basically they are leaving you with a limit they are comfortable with at this time.

It's unpleasant, but not the end of the world.

Use your card like you normally would, pay it off in full, and in time your limit will go up again. It's by no means some reflection on how much of terrible borrower you are. After all, you paid what you owed.

A little patience and payments in full go a long way.

Good luck!

Re: Discover lowered credit limit

Anonymous — Tue, 19 Nov 2019 23:58:23 GMT

Stranger things have happened. In the future, this card could be your favorite card and have a very generous credit line.

Re: Discover lowered credit limit

Anonymous — Wed, 20 Nov 2019 02:45:33 GMT

for those who got their credit line lowered, were you carrying balances with the 0% apr promo?

Re: Discover lowered credit limit

Anonymous — Wed, 20 Nov 2019 02:49:25 GMT

Great question. I like to run up balances on zeros, and was contemplating on whether to do that with DISCOVER, provided they give me one if I request it. But my guess is they give CLDs to riskier accounts and I would be fine doing it.

Re: Discover lowered credit limit

Remedios — Wed, 20 Nov 2019 03:02:04 GMT

@Anonymous wrote:
for those who got their credit line lowered, were you carrying balances with the 0% apr promo?

It almost never just about one card. CLDs are often preceded by high utilization on multiple cards, with only minimum (or close to) payments for prolonged period of time.

It's best to avoid having multiple maxed out cards, especially with young and/or thin profiles

Another thing, if you have multiple cards from the same lender, paying in full on other cards while having higher utilization on one of them is advisable if one wants to avoid CLD on cards that dont have high utilization.

Sometimes you'll see "but I was making 10X minimin payment" and that sounds really great until it's mentioned that balance is $10,000.00.

Carrying a balance during 0% promo is fine, that's what it's there for, but make it look like it will get paid off by the time promo is done.

Re: Discover lowered credit limit

sghosh5 — Wed, 20 Nov 2019 13:18:53 GMT

@Anonymous wrote:
I recently got a consolidation loan and paid off all credit cards, total around $7k, not all have reported yet the zero balance. My utilization was pretty high, above 80%, but essentially is now 0, but since everyone hasn't reported the last payment, it is still around 36%. My credit score has gone from 597 to 660 just based on the reporting that has been done. I have late payments and paid collections from 2015 at the end of an unemployment stint.

Discover was nearly maxed out at about 1450 with a 1500 credit limit. I logged onto my account today and discover my credit limit went from 1500 to 500. So I pay off the account to a zero balance and they decrease my credit?

A month ago my utilization was higher and now its lower, I pay the card off, they lower the limit. I called customer support and she said they usually notify you and also reviewed my account and couldn't find a reason why. She gave me a different number to call during business hours during the week so I will call then.

They did same with me, my credit limits with them was 4k and 8.5k. Just when i had few large purchases on my other cards they reduced my limits to a joke 500 dollars limit in each. I am actually thinking of closing them. Their Travel IT card is a joke. It should have never categorized as a travel card

Re: Discover lowered credit limit

Anonymous — Wed, 27 Nov 2019 21:20:02 GMT

Discover just screwed me over, too. $2285 balance with $3300 CL. No payments missed. double or triple payments made each month.

credit limit decreased to $2400, basically maxing out my card and further lowering my score.

It doesn't pay to make extra payments each month. In hindsight I should have just paid the min eahc month. I will NEVER give those mothereffers at Discover any extra money ever again! They will get min payments each month for the next few years just out of spite.

Re: Discover lowered credit limit

Anonymous — Wed, 27 Nov 2019 21:24:38 GMT

@Anonymous wrote:
Discover just screwed me over, too. $2285 balance with $3300 CL. No payments missed. double or triple payments made each month.

credit limit decreased to $2400, basically maxing out my card and further lowering my score.

It doesn't pay to make extra payments each month. In hindsight I should have just paid the min eahc month. I will NEVER give those mothereffers at Discover any extra money ever again! They will get min payments each month for the next few years just out of spite.

I understand that you're angry right now but if you retaliate by looking riskier, they may just balance chase you and keep you maxed. Computers make these decisions, they're rarely reviewed by a human. You would just be hurting yourself.

Re: Discover lowered credit limit

Anonymous — Wed, 27 Nov 2019 21:58:49 GMT

@Anonymous wrote:
@Anonymous wrote:
Discover just screwed me over, too. $2285 balance with $3300 CL. No payments missed. double or triple payments made each month.

credit limit decreased to $2400, basically maxing out my card and further lowering my score.

It doesn't pay to make extra payments each month. In hindsight I should have just paid the min eahc month. I will NEVER give those mothereffers at Discover any extra money ever again! They will get min payments each month for the next few years just out of spite.
I understand that you're angry right now but if you retaliate by looking riskier, they may just balance chase you and keep you maxed. Computers make these decisions, they're rarely reviewed by a human. You would just be hurting yourself.

Yes, and in any case you are not hurting them by paying interest. It's best for you to pay if off as soon as you can (taking care of higher rate interest first)