topic Re: Are There Tips to Avoid CL Reductions? in Credit Cards

Are There Tips to Avoid CL Reductions?

Repairman — Tue, 19 Jan 2021 14:03:26 GMT

I'm wondering if there are any tips, or things you can do to help improve your chances of not having credit cards reduce your cl on cards that you keep at a 0 balance. I intend to predominantly use 1 card at a time, which may change from time to time, and keep all others at zero, but I'm worried that cls could be slashed. 1 thing I am already doing, is having at least 1 recurring charge on each of my cards, so even if I'm not actively swiping it, SOMETHING still posts to it every month and gets PIF. Is there anything else I can do to maintain my cls?

Re: Are There Tips to Avoid CL Reductions?

Remedios — Tue, 19 Jan 2021 14:09:16 GMT

@Repairman that depends on a lender, and limit to certain extent.

A pack of gum every month will keep $200.00 intact, but it won't do the same for $20,000.00 card.

Some lenders are by far more likely to do CLD (or close cards) for non use than others.

The easiest way to keep this from happening is not adding cards you have minimal, or no use for at all.

In a nutshell, the trick for preventing CLDs is using cards (and avoiding maxed cards).

Re: Are There Tips to Avoid CL Reductions?

AverageJoesCredit — Tue, 19 Jan 2021 14:12:40 GMT

Yes, use it and pay😂

Re: Are There Tips to Avoid CL Reductions?

Anonymous — Tue, 19 Jan 2021 14:18:16 GMT

You've already got the important thing nailed down, which is regular usage of all of your cards via a recurring charge as you explained. That IMO will prevent CLDs the majority of the time. As stated in the previous reply, the next thing to look at is usage relative to limit(s). IMO that factor is far less impactful and really is profile dependent. On a weaker profile (especially a dirty file) it may matter more than on a solid profile. I have what I would consider a solid profile and have never received a CLD. Per cycle I use generally between <1% and 5% of my credit limits on each card, where my daily driver card may see more like 10%-15%, so still not significant. Even on the cards that routinely see <1% usage monthly against a high CL I have not experienced CLDs.

Re: Are There Tips to Avoid CL Reductions?

Repairman — Tue, 19 Jan 2021 14:22:24 GMT

@Remedios wrote:
@Repairman that depends on a lender, and limit to certain extent.
A pack of gum every month will keep $200.00 intact, but it won't do the same for $20,000.00 card.
Some lenders are by far more likely to do CLD (or close cards) for non use than others.
The easiest way to keep this from happening is not adding cards you have minimal, or no use for at all.
In a nutshell, the trick for preventing CLDs is using cards (and avoiding maxed cards).

Thanks. I guess I'm wondering how much use would theoretically help to maintain current cls. For example, with Capital One. If I have a $15,000 cl, would it be in jeopardy with only a $22 recurring charge every month? Would it help if I put a $300 charge on it also, every month, or every 6 months, or will much higher usage likely be needed to avoid reduction?

Re: Are There Tips to Avoid CL Reductions?

Repairman — Tue, 19 Jan 2021 14:28:57 GMT

@Anonymous wrote:
You've already got the important thing nailed down, which is regular usage of all of your cards via a recurring charge as you explained. That IMO will prevent CLDs the majority of the time. As stated in the previous reply, the next thing to look at is usage relative to limit(s). IMO that factor is far less impactful and really is profile dependent. On a weaker profile (especially a dirty file) it may matter more than on a solid profile. I have what I would consider a solid profile and have never received a CLD. Per cycle I use generally between <1% and 5% of my credit limits on each card, where my daily driver card may see more like 10%-15%, so still not significant. Even on the cards that routinely see <1% usage monthly against a high CL I have not experienced CLDs.

Great insight. Thank you.

Re: Are There Tips to Avoid CL Reductions?

AverageJoesCredit — Tue, 19 Jan 2021 14:33:55 GMT

@Repairman wrote:
@Remedios wrote:
@Repairman that depends on a lender, and limit to certain extent.
A pack of gum every month will keep $200.00 intact, but it won't do the same for $20,000.00 card.
Some lenders are by far more likely to do CLD (or close cards) for non use than others.
The easiest way to keep this from happening is not adding cards you have minimal, or no use for at all.
In a nutshell, the trick for preventing CLDs is using cards (and avoiding maxed cards).
Thanks. I guess I'm wondering how much use would theoretically help to maintain current cls. For example, with Capital One. If I have a $15,000 cl, would it be in jeopardy with only a $22 recurring charge every month? Would it help if I put a $300 charge on it also, every month, or every 6 months, or will much higher usage likely be needed to avoid reduction?

My opinion really doesnt matter since im on the lower spectrum of credit and $ but i dont really see a big distinction between a pack of gun and a $300 charge on a $15k credit line. Yes i understand there's a big difference in price of gum and $300 but realistically, if you are only using $300 out of $15k, thats not really using the credit card in relation to its limit. Ive come to understand if a lender is going to close my account for low usage, so be it , most importantly i understand that risk, but i wont go out of my eay just to ensure it wont get closed by spending more than i can. Ok, nuff coffee, im outzy

Re: Are There Tips to Avoid CL Reductions?

Anonymous — Tue, 19 Jan 2021 14:36:10 GMT

@Repairman wrote:
Thanks. I guess I'm wondering how much use would theoretically help to maintain current cls. For example, with Capital One. If I have a $15,000 cl, would it be in jeopardy with only a $22 recurring charge every month? Would it help if I put a $300 charge on it also, every month, or every 6 months, or will much higher usage likely be needed to avoid reduction?

It really depends on your profile and the lender in question. With Capital One, they are known to CLD low used credit lines that are > $10k to $10k rather often. With a $22/mo charge being the only thing the card is seeing, I would more or less expect a CLD from $15k to $10k at some point. But, is it really "worth" putting several hundred dollars or maybe up to $1k on the card every month in attempt to reduce the chances of that CLD? I would say not. I mean, if $22/mo is all you see the card fit for, taking a CLD on it really isn't a big deal.

Re: Are There Tips to Avoid CL Reductions?

Repairman — Tue, 19 Jan 2021 23:46:06 GMT

@Anonymous wrote:
@Repairman wrote:
Thanks. I guess I'm wondering how much use would theoretically help to maintain current cls. For example, with Capital One. If I have a $15,000 cl, would it be in jeopardy with only a $22 recurring charge every month? Would it help if I put a $300 charge on it also, every month, or every 6 months, or will much higher usage likely be needed to avoid reduction?
It really depends on your profile and the lender in question. With Capital One, they are known to CLD low used credit lines that are > $10k to $10k rather often. With a $22/mo charge being the only thing the card is seeing, I would more or less expect a CLD from $15k to $10k at some point. But, is it really "worth" putting several hundred dollars or maybe up to $1k on the card every month in attempt to reduce the chances of that CLD? I would say not. I mean, if $22/mo is all you see the card fit for, taking a CLD on it really isn't a big deal.

I would just like to have the credit available to me if I need it in the future. I actually only have 1 currently open cc who's cl has been reduced, and it is 1 of my 3 Cap One cards, but that is also my only cc where I've put absolutely NO usage on in over a year. I planned on closing it, so I didn't care about usage. My 2 other higher limit Cap Ones have seen major use every year, but I plan to dial it back now and sock drawer them. Right now, my only need for them are as Emergency cards.

Re: Are There Tips to Avoid CL Reductions?

HeavenOhio — Tue, 19 Jan 2021 15:38:41 GMT

@Anonymous wrote:
It really depends on your profile and the lender in question. With Capital One, they are known to CLD low used credit lines that are > $10k to $10k rather often. With a $22/mo charge being the only thing the card is seeing, I would more or less expect a CLD from $15k to $10k at some point.

Until the past few months, this was Capital One's predominant CLD. It was pretty easy to pin down that it could be avoided by spending $1,000 or so over the course of the previous 12 months. Recent CLDs have cut deeper, though, and I don't think we've nailed down any patterns.

Re: Are There Tips to Avoid CL Reductions?

Anonymous — Tue, 19 Jan 2021 19:01:51 GMT

@Anonymous wrote:
@Repairman wrote:
Thanks. I guess I'm wondering how much use would theoretically help to maintain current cls. For example, with Capital One. If I have a $15,000 cl, would it be in jeopardy with only a $22 recurring charge every month? Would it help if I put a $300 charge on it also, every month, or every 6 months, or will much higher usage likely be needed to avoid reduction?
It really depends on your profile and the lender in question. With Capital One, they are known to CLD low used credit lines that are > $10k to $10k rather often. With a $22/mo charge being the only thing the card is seeing, I would more or less expect a CLD from $15k to $10k at some point. But, is it really "worth" putting several hundred dollars or maybe up to $1k on the card every month in attempt to reduce the chances of that CLD? I would say not. I mean, if $22/mo is all you see the card fit for, taking a CLD on it really isn't a big deal.

Yes, as part of the "older" pattern, I had two Quicksilvers, one with $20K, one with $35K. The $20K hadn't been used for at least two years, and Cap One closed. I had happened to put maybe $200-$300 on the other one in the previous year, and that got CLDd to $10K

So, yes, I lost $35K in limits. But I don't regret not putting more on it, as a 1.5% card really has no value these days. While it may sound good to keep CLs in case they are needed at some point, if there is a cost (in this case spending on cards with lower rewards) it might not be worth it. Go for CLIs on the more worthwile cards, and/or question if you will ever really need that spare CL (if you could use it, could you afford payments for example!)

Re: Are There Tips to Avoid CL Reductions?

wasCB14 — Tue, 19 Jan 2021 19:24:47 GMT

@Repairman wrote:
I'm wondering if there are any tips, or things you can do to help improve your chances of not having credit cards reduce your cl on cards that you keep at a 0 balance. I intend to predominantly use 1 card at a time, which may change from time to time, and keep all others at zero, but I'm worried that cls could be slashed. 1 thing I am already doing, is having at least 1 recurring charge on each of my cards, so even if I'm not actively swiping it, SOMETHING still posts to it every month and gets PIF. Is there anything else I can do to maintain my cls?

Probably not the answer you're looking for, but...

I don't ask for CLIs on cards I'm never going to put much spend on in the first place. So it would be fairly unlikely for a lender to CLD me.

Re: Are There Tips to Avoid CL Reductions?

Kforce — Tue, 19 Jan 2021 19:53:57 GMT

@wasCB14 wrote:
@Repairman wrote:
I'm wondering if there are any tips, or things you can do to help improve your chances of not having credit cards reduce your cl on cards that you keep at a 0 balance. I intend to predominantly use 1 card at a time, which may change from time to time, and keep all others at zero, but I'm worried that cls could be slashed. 1 thing I am already doing, is having at least 1 recurring charge on each of my cards, so even if I'm not actively swiping it, SOMETHING still posts to it every month and gets PIF. Is there anything else I can do to maintain my cls?
Probably not the answer you're looking for, but...
I don't ask for CLIs on cards I'm never going to put much spend on in the first place. So it would be fairly unlikely for a lender to CLD me.

+ 1

I also don't ask for CL increases on any except my daily use cards.

I cap or stop asking when those get to a reasonable limit. (For me 20k)

Many of my cards have hit that amount with almost no spend.

No need for more than 20k on a card you put 5$ on every other month.

I am sure it is profile, income and issuer specific but have never had a decrease because of lack of use.

This last year I put 90% of my spend on 1 card and all others just 5-10 every few months.

Even in 2020 I had no CL decreases.

Re: Are There Tips to Avoid CL Reductions?

Anonymous — Tue, 19 Jan 2021 19:55:53 GMT

I don't think many people can really justify "needing" more than one or two "just in case" type cards with larger limits that are rendered to the SD or see next to no spend outside of an attempt to prevent their closure. I think under most circumstances it would make the most sense to just grow the limits on the cards that are frequently used and use those more if a "just in case" situation presents itself.

Re: Are There Tips to Avoid CL Reductions?

Remedios — Tue, 19 Jan 2021 19:57:58 GMT

I asked, and asked, and asked for no reason other than "why not". They grew and grew, and now they are doing nothing but weighing me down since I have no way to justify limits via use on those cards.

I've filled that under "lesson learned"

There will no shock or surprise if they get CLDs or end up closed for inactivity.

Re: Are There Tips to Avoid CL Reductions?

sxa001 — Tue, 19 Jan 2021 23:51:50 GMT

Lots of really good advice here, and one of the reasons I have never gone crazy with asking for CLIs. I have never had a CLD, but it wouldn't surprise me now that I have gotten some CLI's on cards that really don't have crazy spend it might happen. As long as my core cards have limits necessary for my spend without throwing my util out of whack though I am not going to sweat it.

Re: Are There Tips to Avoid CL Reductions?

Repairman — Tue, 19 Jan 2021 23:58:41 GMT

@Kforce wrote:
@wasCB14 wrote:
@Repairman wrote:
I'm wondering if there are any tips, or things you can do to help improve your chances of not having credit cards reduce your cl on cards that you keep at a 0 balance. I intend to predominantly use 1 card at a time, which may change from time to time, and keep all others at zero, but I'm worried that cls could be slashed. 1 thing I am already doing, is having at least 1 recurring charge on each of my cards, so even if I'm not actively swiping it, SOMETHING still posts to it every month and gets PIF. Is there anything else I can do to maintain my cls?
Probably not the answer you're looking for, but...
I don't ask for CLIs on cards I'm never going to put much spend on in the first place. So it would be fairly unlikely for a lender to CLD me.
+ 1
I also don't ask for CL increases on any except my daily use cards.
I cap or stop asking when those get to a reasonable limit. (For me 20k)
Many of my cards have hit that amount with almost no spend.
No need for more than 20k on a card you put 5$ on every other month.
I am sure it is profile, income and issuer specific but have never had a decrease because of lack of use.
This last year I put 90% of my spend on 1 card and all others just 5-10 every few months.
Even in 2020 I had no CL decreases.

I think another part of it, for me, is the fact that my "daily" card changes from time to time, depending on what I'm using it for and where I'm using it, as well as whatever promotions or benefits they have going on at the time. So I think I would just like to know that that flexibility is there whenever I need it.

Re: Are There Tips to Avoid CL Reductions?

Aim_High — Wed, 20 Jan 2021 01:17:36 GMT

@Repairman wrote:
@Anonymous wrote:
@Repairman wrote:
... I'm wondering how much use would theoretically help to maintain current cls ...
It really depends on your profile and the lender in question. With Capital One, they are known to CLD low used credit lines that are > $10k to $10k rather often....
I would just like to have the credit available to me if I need it in the future. I actually only have 1 currently open cc who's cl has been reduced, and it is 1 of my 3 Cap One cards, but that is also my only cc where I've put absolutely NO usage on in over a year. I planned on closing it, so I didn't care about usage. My 2 other higher limit Cap Ones have seen major use every year, but I plan to dial it back now and sock drawer them. Right now, my only need for them are as Emergency cards.

I've seen this question before and it raises great points about overall card strategies.

One strategy is maximizing rewards. We all have different tolerances and viewpoints about that. I've seen some on My Fico value rewards less than other factors. Others value rewards to such a degree that they're willing to add 100 extra cards to save a nickel a year on each one. Most of us are in between.

And another strategy is adding (or padding) credit limits far above what we use on a monthly basis to help with utilization or for emergency use. Again, how much this strategy is pursued varies among us greatly. At some point, adding extra utilization becomes more of a burden than a benefit because many lenders won't allow you to keep it if you don't use it. So we all have to decide how much we value the credit limit padding over other factors such as rewards lost. And how much padding is sufficient.

In my opinion, my cards are a financial tool and they can benefit me in BOTH of the above ways. For me, there is a balance between maintaining my credit cards by usage with the rewards. Some recommend to always go for the most rewards, regardless of maintaining some healthy card usage. So my advice is to decide what you might be willing to forfeit in rewards to keep those lines open. If you value a line of credit, I see no problem in trading some amount of higher rewards once or twice a year to put a little extra spend on a card above that recurring charge. Make it your daily driver for at least one month or so out of the year.

I agree with the above advice that if all you put on a Capital One card with a $15K limit is a monthly recurring $22 charge, you probably won't keep that limit over the long haul. (That's only $264 a year or 1.76% of the credit limit!) They like to see some usage. With some other lenders, I have cards I've put $0.00 spend on for multiple years and not had it cancelled, so it's very lender-specific.

Re: Are There Tips to Avoid CL Reductions?

Repairman — Wed, 20 Jan 2021 02:55:37 GMT

@Aim_High wrote:
@Repairman wrote:
@Anonymous wrote:
@Repairman wrote:
... I'm wondering how much use would theoretically help to maintain current cls ...
It really depends on your profile and the lender in question. With Capital One, they are known to CLD low used credit lines that are > $10k to $10k rather often....
I would just like to have the credit available to me if I need it in the future. I actually only have 1 currently open cc who's cl has been reduced, and it is 1 of my 3 Cap One cards, but that is also my only cc where I've put absolutely NO usage on in over a year. I planned on closing it, so I didn't care about usage. My 2 other higher limit Cap Ones have seen major use every year, but I plan to dial it back now and sock drawer them. Right now, my only need for them are as Emergency cards.
I've seen this question before and it raises great points about overall card strategies.

One strategy is maximizing rewards. We all have different tolerances and viewpoints about that. I've seen some on My Fico value rewards less than other factors. Others value rewards to such a degree that they're willing to add 100 extra cards to save a nickel a year on each one. Most of us are in between.

And another strategy is adding (or padding) credit limits far above what we use on a monthly basis to help with utilization or for emergency use. Again, how much this strategy is pursued varies among us greatly. At some point, adding extra utilization becomes more of a burden than a benefit because many lenders won't allow you to keep it if you don't use it. So we all have to decide how much we value the credit limit padding over other factors such as rewards lost. And how much padding is sufficient.

In my opinion, my cards are a financial tool and they can benefit me in BOTH of the above ways. For me, there is a balance between maintaining my credit cards by usage with the rewards. Some recommend to always go for the most rewards, regardless of maintaining some healthy card usage. So my advice is to decide what you might be willing to forfeit in rewards to keep those lines open. If you value a line of credit, I see no problem in trading some amount of higher rewards once or twice a year to put a little extra spend on a card above that recurring charge. Make it your daily driver for at least one month or so out of the year.

I agree with the above advice that if all you put on a Capital One card with a $15K limit is a monthly recurring $22 charge, you probably won't keep that limit over the long haul. (That's only $264 a year or 1.76% of the credit limit!) They like to see some usage. With some other lenders, I have cards I've put $0.00 spend on for multiple years and not had it cancelled, so it's very lender-specific.

Thanks. Very sound points. And using each sock drawered card as the daily for a monthout of the year is definitely doable.

Re: Are There Tips to Avoid CL Reductions?

UncleB — Wed, 20 Jan 2021 04:53:03 GMT

@HeavenOhio wrote:
@Anonymous wrote:
It really depends on your profile and the lender in question. With Capital One, they are known to CLD low used credit lines that are > $10k to $10k rather often. With a $22/mo charge being the only thing the card is seeing, I would more or less expect a CLD from $15k to $10k at some point.
Until the past few months, this was Capital One's predominant CLD. It was pretty easy to pin down that it could be avoided by spending $1,000 or so over the course of the previous 12 months. Recent CLDs have cut deeper, though, and I don't think we've nailed down any patterns.

One of my Capital One cards went from $17k to $5k for lack of use.

I'm not too broken-up over it (they were right, it wasn't being used) but it's notable that at one time not that many years ago I considered Capital One my 'rock'... they were super-reliable even for weird one-off charges, and I was comfortable going months at a time without using it knowing it wouldn't be a problem. I recall some others reported going literally years without using their Capital One card and when it was needed it worked with no drama. Sadly things with Capital One are no longer the same.

So far I've not been targeted by any other lenders, but it could still happen. Policies and algorithms can be changed with a keystroke, so what is 'safe' today might not be tomorrow (like Capital One). There's really no way to know if/when any other lenders will decide to take similar action.