topic Re: Request credit line DECREASE: when does it make sense? in Credit Cards

Request credit line DECREASE: when does it make sense?

brother7 — Fri, 07 Feb 2020 22:34:03 GMT

Under what circumstances would it make sense to request a credit line decrease?

Is there such thing as having too much available revolving credit? If so, what is the guideline to determine if one should reduce the amount of available revolving credit?

Re: Request credit line DECREASE: when does it make sense?

Jnbmom — Fri, 07 Feb 2020 22:41:55 GMT

I have never personally requested decreases, I worked hard for my limits .

i have however been denied and I suspect I may have too much avail credit (penfed cough cough) but other than them I haven't had it happened with other lenders.

If you can handle your lines and not overextend I don't see a reason to decrease, but if one has history of overextending themselves then I could very well see lowering their limits .

Re: Request credit line DECREASE: when does it make sense?

SouthJamaica — Fri, 07 Feb 2020 22:42:49 GMT

@brother7 wrote:
Under what circumstances would it make sense to request a credit line decrease?
Is there such thing as having too much available revolving credit? If so, what is the guideline to determine if one should reduce the amount of available revolving credit?

IMHO never.

Yes there can be such a thing as too much available revolving credit; I have been turned down by credit unions for (a) CLI's and (b) credit cards for that reason. But there's no guideline, because no 2 lenders are alike, and no 2 underwriters at the same lender are alike.

Re: Request credit line DECREASE: when does it make sense?

wasCB14 — Fri, 07 Feb 2020 22:43:24 GMT

One situation where it can make sense is if you already have a lot of credit with a lender (relative to your income, that is) and want to get a new card from them, or a big CLI on another card. Requesting a CLD before applying can sometimes make it easier to get an approval.

Re: Request credit line DECREASE: when does it make sense?

Anonymous — Fri, 07 Feb 2020 22:59:43 GMT

Although I haven't personally requested a decrease, one reason could be as simple as not feeling comfortable with the credit you have available to you for a variety of factors such as perhaps a CL someone has may not constitute in relation to their income.

Re: Request credit line DECREASE: when does it make sense?

coldfusion — Fri, 07 Feb 2020 23:03:18 GMT

@wasCB14 wrote:
One situation where it can make sense is if you already have a lot of credit with a lender (relative to your income, that is) and want to get a new card from them, or a big CLI on another card. Requesting a CLD before applying can sometimes make it easier to get an approval.

Ta-Da.

Classic example used to be with Chase before they implemented their 5/24 policy across all product. Emperical guidance was to have no more than (yearly gross income x 50% - $10K) in total aggregate limit across all Chase cards before applying for a new one so request a CLD as necessary.

Re: Request credit line DECREASE: when does it make sense?

NoMoreE46 — Fri, 07 Feb 2020 23:31:07 GMT

Or if you are OCD and have a limit of $20,300 and request the $300 to be chopped. 🤨

Re: Request credit line DECREASE: when does it make sense?

dragontears — Fri, 07 Feb 2020 23:31:08 GMT

@coldfusion wrote:
@wasCB14 wrote:
One situation where it can make sense is if you already have a lot of credit with a lender (relative to your income, that is) and want to get a new card from them, or a big CLI on another card. Requesting a CLD before applying can sometimes make it easier to get an approval.
Ta-Da.

Classic example used to be with Chase before they implemented their 5/24 policy across all product. Emperical guidance was to have no more than (yearly gross income x 50% - $10K) in total aggregate limit across all Chase cards before applying for a new one so request a CLD as necessary.

Another example I have seen is Synch tends to limit exposure to 100k combined limits and some people have closed/taken a CL decrease because they wanted a new card that Synch backed

Re: Request credit line DECREASE: when does it make sense?

Anonymous — Sat, 08 Feb 2020 00:27:31 GMT

And another example, which doesn't apply to anyone here I'm sure, is to avoid "eyes on the account". Let's say you have done things such as fairly heavy MS on a card from bank X. The problematic behaviour doesn't really show up in scores (the way bonus chasing might) etc, but might be obvious if there is a manual review. Now you want a card from the same issuer. The goal is to get automated approval and in many cases reducing your exposure with the issuer so it is clearly in an ok-for-new-card range may help maximize the chance of that.

Re: Request credit line DECREASE: when does it make sense?

Anonymous — Sat, 08 Feb 2020 00:49:21 GMT

When you can't stop spending😅

Re: Request credit line DECREASE: when does it make sense?

Kforce — Sat, 08 Feb 2020 01:13:58 GMT

I have most of my cards decreased and locked at 15k or 20k.

I just don't see a reason for me to have high limits.

Not the norm in this forum, but my 2c.

Re: Request credit line DECREASE: when does it make sense?

601flyguy — Sat, 08 Feb 2020 01:20:04 GMT

Credit line deacrease? What's that!?!?

Re: Request credit line DECREASE: when does it make sense?

Anonymous — Sat, 08 Feb 2020 01:35:49 GMT

I would only take one if I applied for a card and was declined because my income didn't support any more with that lender.

Honestly most lenders have accounted for this by just taking away from existing cards to make the new one or allowing you to call in with a declined app and ask to just move some of the limit over.

I was going to CLD my QS before I applied for SavorOne hoping that it would push over the arrow towards approval and I was advised by FinStar and others not to do so and I got a $10K instant approval which put my income vs limits with Capital One at almost 100%. Sometimes lenders surprise you with how much they trust you - Synchrony has basically doubled my income across my 5 accounts.

Re: Request credit line DECREASE: when does it make sense?

Anonymous — Sat, 08 Feb 2020 01:39:40 GMT

@Kforce wrote:
I have most of my cards decreased and locked at 15k or 20k.
I just don't see a reason for me to have high limits.
Not the norm in this forum, but my 2c.

Same here. When my monthly spend is constrained to under 2k there's no need to have 5 figure limits, other than for utilization padding, and PIFing makes that mostly moot anyway.

I also set limits on my cards based on their intended use. For example, I keep one card at a $500 limit since I use it mainly for gas and groceries and don't need a high limit for these things, plus if it gets skimmed in a gas pump or in an online security breach, the thieves won't get very far with it with that limit. I have one card with a higher limit but only until the 0% promo expires. After that, who knows. I may lower it as well.

Re: Request credit line DECREASE: when does it make sense?

Anonymous — Sat, 08 Feb 2020 01:48:59 GMT

I'm one who has requested a CLD and for good reason back in early 2001. I had a joint account and started divorce proceedings and then the balance started ballooning and I wasn't the one using it. My line on my Citi card was about 15,100 with a balance ballooned to about $5,800. I called and requested the line to be dropped to $6,500. Left unchecked, the balance would have been 15,100 and transactions going over.

I could have just closed the account, but I didn't want to be accused of cutting off funds to the wife. That would give her $700 short term emergency money, or reckless $700 spending, her choice. But unfortunately, during the call, the wife grabbed the phone and started yelling at the CSR. Citi closed my account.

No biggie though. When the divorce was final, I called Citi to open a new account. Was approved, with a line of $6,500 lol. I still have the account, it's my DC card, my oldest and the CL increased 6 fold in just 6 years.

Re: Request credit line DECREASE: when does it make sense?

Anonymous — Sat, 08 Feb 2020 01:58:13 GMT

@Anonymous wrote:
I could have just closed the account, but I didn't want to be accused of cutting off funds to the wife. That would give her $700 short term emergency money, or reckless $700 spending, her choice. But unfortunately, during the call, the wife grabbed the phone and started yelling at the CSR. Citi closed my account.

Now there's a really good reason for a CLD. Did Citi close the account because of something the ex said to the CSR or did you do it because of what she did?

I actually have a similar story... well not quite like yours, but I had a card that my wife was an AU on, and I had CLDed it right before she left me. Now she didn't use the card after she left (and I got it from her a couple months later and removed her as an AU once I knew she wasn't coming back), but in case she did, the CLD would have saved my bacon.

Re: Request credit line DECREASE: when does it make sense?

Anonymous — Sat, 08 Feb 2020 02:19:32 GMT

@Anonymous wrote:
@Anonymous wrote:
I could have just closed the account, but I didn't want to be accused of cutting off funds to the wife. That would give her $700 short term emergency money, or reckless $700 spending, her choice. But unfortunately, during the call, the wife grabbed the phone and started yelling at the CSR. Citi closed my account.
Now there's a really good reason for a CLD. Did Citi close the account because of something the ex said to the CSR or did you do it because of what she did?

I actually have a similar story... well not quite like yours, but I had a card that my wife was an AU on, and I had CLDed it right before she left me. Now she didn't use the card after she left (and I got it from her a couple months later and removed her as an AU once I knew she wasn't coming back), but in case she did, the CLD would have saved my bacon.

Yeah, it was what she said. "Don't you dare drop that credit limit you $*%*@/@". That will do it when they see risk to begin with. I just asked for a CLD, the CSR told me unfortunately they will have to close the account.

Even today with text messages when the card is used and the lock feature, that probably won't save anybody on a joint account. I would imagine the other cardholder can just unlock it.

Back then, even in your situation, I wouldn't have found out until I got the statement in the mail. A lot of damage could be done between closing dates. I would have been nervous having a card out there where it could be used at any point. You were fortunate.

Re: Request credit line DECREASE: when does it make sense?

Anonymous — Sat, 08 Feb 2020 02:32:28 GMT

@Anonymous wrote:
Yeah, it was what she said. "Don't you dare drop that credit limit you $*%*@/@". That will do it when they see risk to begin with. I just asked for a CLD, the CSR told me unfortunately they will have to close the account.

Even today with text messages when the card is used and the lock feature, that probably won't save anybody on a joint account. I would imagine the other cardholder can just unlock it.

Back then, even in your situation, I wouldn't have found out until I got the statement in the mail. A lot of damage could be done between closing dates. I would have been nervous having a card out there where it could be used at any point. You were fortunate.

Closing was probably the best (only) option for a joint account. If she had just been an AU, they could have taken her off and then issued a new card/account # (but then, she could have grabbed it out of the mail if she was still living with you). When I took my ex off as an AU, they asked me if I wanted a new card issued. I said no, since I had gotten the card from her, and she was no longer living with me.

I was fortunate, but I knew her, she probably wouldn't have thought to use the card, at least right away. I would have closed it/taken her off right away if I felt there was a chance she would abuse it. She left suddenly and the card was the last thing on my mind at the time. But with the CLD it would have limited the damage anyway... I had lowered it from $16500 to $2000 about a month before she left, so a pretty big decrease. Maybe my subconscious knew something I didn't.

Re: Request credit line DECREASE: when does it make sense?

KJinNC — Sat, 08 Feb 2020 02:34:42 GMT

Answering the question in the OP and thread title, I wouldn't worry about it unless you start getting denial reasons that you think might be related to this. It seems far-fetched to me that it would be a problem.

Re: Request credit line DECREASE: when does it make sense?

Anonymous — Sat, 08 Feb 2020 02:46:04 GMT

@Anonymous wrote:
@Anonymous wrote:
Yeah, it was what she said. "Don't you dare drop that credit limit you $*%*@/@". That will do it when they see risk to begin with. I just asked for a CLD, the CSR told me unfortunately they will have to close the account.

Even today with text messages when the card is used and the lock feature, that probably won't save anybody on a joint account. I would imagine the other cardholder can just unlock it.

Back then, even in your situation, I wouldn't have found out until I got the statement in the mail. A lot of damage could be done between closing dates. I would have been nervous having a card out there where it could be used at any point. You were fortunate.
Closing was probably the best (only) option for a joint account. If she had just been an AU, they could have taken her off and then issued a new card/account # (but then, she could have grabbed it out of the mail if she was still living with you). When I took my ex off as an AU, they asked me if I wanted a new card issued. I said no, since I had gotten the card from her, and she was no longer living with me.

I was fortunate, but I knew her, she probably wouldn't have thought to use the card, at least right away. I would have closed it/taken her off right away if I felt there was a chance she would abuse it. She left suddenly and the card was the last thing on my mind at the time. But with the CLD it would have limited the damage anyway... I had lowered it from $16500 to $2000 about a month before she left, so a pretty big decrease. Maybe my subconscious knew something I didn't.

Yeah, I already had to close the joint checking account when the bank called 2 days after payday to tell me I have a negative balance, and so I opened a new single checking account. To close the card as well would have made me look like I was cutting her off (she was a stay at home mom). At least with Citi closing it, I could prove the account was closed by grantor. So it worked out for the best. I didn't damage my relationship with Citi either, they welcomed me back and seemed to trust me when I opened the new account about 8 months later.

Yep, it's always good to protect against possible abuse of the card in certain situations. A CLD is good in these situations.