topic Re: Synchrony Decreased My Credit Limit in Credit Cards

Synchrony Decreased My Credit Limit

PhilL — Sun, 17 Dec 2023 18:32:02 GMT

I have a Venmo Credit Card, which Synchrony Bank services.

The other day, I received notice in an official letter that Synchrony was decreasing my $4,000+ credit limit to only a few dollars above my balance.

They said the balance amount to the credit limit is too high and that the payment amounts over the past several months were too low, among other factors.

That said, I don't heavily use this particular card often and have a consistent on-time payment history with all my accounts.

My main question is:

What is going on? Will action be taken against me on my cards with other banks?

What should I do in response to this?

Thank you in advance for your opinion

Re: Synchrony Decreased My Credit Limit

pizza1 — Sun, 17 Dec 2023 18:45:19 GMT

Hello welcome to the forums!

Sounds like they got spooked a little, and are balance chasing you. Are you carrying balances on other cards too close to the limits, or are you only paying the "minimum payment"?

Has any other creditor taken action against you for anything, or any new negatives reporting?

Re: Synchrony Decreased My Credit Limit

PhilL — Sun, 17 Dec 2023 19:04:04 GMT

Hi!

I suspected balance chasing as I've read Synchrony has done this to others with the Venmo card.

Unfortunately, yes, I am carrying significant balances on three or so other cards. I have only recently made the minimum payments on Venmo and the unrelated other accounts.

That said, I have a 100% on-time payment record across all my accounts and no derogatory info against me.

The only negative thing to happen in the past year was an identity theft issue where someone tried to open an account in my name. However, I informed my bank of this, and they removed it from my record.

Re: Synchrony Decreased My Credit Limit

CreditCuriosity — Sun, 17 Dec 2023 19:08:40 GMT

Sorry this happened but appears you answered your own question and would work on paying down the significant balances so doesn't happen with other lenders as well. Nothing really spooks lenders more than minimum payments for several months other than of course missed/bounced payments

Re: Synchrony Decreased My Credit Limit

PhilL — Sun, 17 Dec 2023 19:18:22 GMT

I've read with Balance Chasers that you don't want to pay it all off immediately.

Do you know if this is true?

Re: Synchrony Decreased My Credit Limit

CreditCuriosity — Sun, 17 Dec 2023 19:20:33 GMT

@PhilL wrote:
I've read with Balance Chasers that you don't want to pay it all off immediately.

Do you know if this is true?

Across that card or all cards? I would certainly pay if off on either that card or all cards if possible as paying interest especially on a high apr card like venmo is certainly suggested for sound financial advise. Sure they might close it, but gotta pay it regardless eventually. I don't think they will do full closure on you though.

Re: Synchrony Decreased My Credit Limit

PhilL — Sun, 17 Dec 2023 19:32:57 GMT

Across all cards?

Why would they do a closure or any adverse action if you make on-time payments?

Re: Synchrony Decreased My Credit Limit

Jnbmom — Sun, 17 Dec 2023 19:53:21 GMT

@PhilL wrote:
Across all cards?

Why would they do a closure or any adverse action if you make on-time payments?

If you are carrying higher balances and only paying the minimum payments this is red flag to lenders and they make take adverse action . You appear as more of risk now .

Re: Synchrony Decreased My Credit Limit

CreditCuriosity — Sun, 17 Dec 2023 19:58:37 GMT

@PhilL wrote:
Across all cards?

Why would they do a closure or any adverse action if you make on-time payments?

You said should you pay balance off and I said yes. Were you refering to just the venmo card or across all cards. Anyways yes pay the balace off as silly if you can payaing 20-30% interest on a card. Hope that clears it up

Re: Synchrony Decreased My Credit Limit

xenon3030 — Sun, 17 Dec 2023 20:01:48 GMT

I would PIF all cards to avoid letting the other lenders to jump into the wagon of balance chasing. After that, Sync may or may not close the card (it is up to them).

If you can, PIF all cards and use the AZEO method to maximize Fico8. This method does not have any downside.

Re: Synchrony Decreased My Credit Limit

markbeiser — Sun, 17 Dec 2023 20:40:32 GMT

@PhilL wrote:
Across all cards?

Why would they do a closure or any adverse action if you make on-time payments?

Your recent financial behavior triggered an algorithm that initiated adverse action against you, which could cascade to other lenders.
Banks are skittish because default rates have been trending up, and there are currently some not good economic indicators.
People carrying high credit card debt, and only making minimum payments, are seen as being at elevated risk of defaulting.
It is based on historical statistical data, and is entirely automated.

Re: Synchrony Decreased My Credit Limit

Kforce — Sun, 17 Dec 2023 20:59:49 GMT

@PhilL wrote:

Will action be taken against me on my cards with other banks?
Unknown but maybe
What should I do in response to this?
You have to pick what to pay down first and how much.
Decide what is most important
Scores, money or lower chance of AA on other card/cards.
&
I've read with Balance Chasers that you don't want to pay it all off immediately.
If this card is less important and you want to maybe save another from AA,
funds might be better spent on another card.
&
I am carrying significant balances on three or so other cards.
I have only recently made the minimum payments on Venmo and the unrelated other accounts.
That said, I have a 100% on-time payment record across all my accounts and no derogatory info against me.

Making minimum payments and having high utilization is a red flag for most issuers that someone is having financial problems.
100% on-time payment record across all accounts and no derogatory info does not negate the above danger.
All issuers dislike minimum payments for many months and high utilization.

If wanting to save money pay down high interest first then move down

If wanting to maybe save a card you really like put all extra and higher payments to that card.

If wanting to help score, would need exact numbers and more info to help.

(I would pick saving money or saving my favorite card)

Re: Synchrony Decreased My Credit Limit

PhilL — Sun, 17 Dec 2023 21:07:09 GMT

Just curious what's an "AA"?

Re: Synchrony Decreased My Credit Limit

Jnbmom — Sun, 17 Dec 2023 21:19:16 GMT

@PhilL wrote:
Just curious what's an "AA"?

Adverse action

Re: Synchrony Decreased My Credit Limit

SouthJamaica — Wed, 20 Dec 2023 15:41:30 GMT

@PhilL wrote:
I have a Venmo Credit Card, which Synchrony Bank services.

The other day, I received notice in an official letter that Synchrony was decreasing my $4,000+ credit limit to only a few dollars above my balance.

They said the balance amount to the credit limit is too high and that the payment amounts over the past several months were too low, among other factors.

That said, I don't heavily use this particular card often and have a consistent on-time payment history with all my accounts.

My main question is:

What is going on? Will action be taken against me on my cards with other banks?

What should I do in response to this?

Thank you in advance for your opinion

Synchrony has been frequently lowering peoples' credit limits during the past couple of years. I personally believe it has more to do with Synchrony's own financial problems than with anything about you.

I do not think it should spill over to your other lenders, although it probably would spill over to other Synchrony cards if you have any.

Re: Synchrony Decreased My Credit Limit

SouthJamaica — Wed, 20 Dec 2023 15:42:51 GMT

@PhilL wrote:
I've read with Balance Chasers that you don't want to pay it all off immediately.

Do you know if this is true?

I don't agree with that; I think it's better to pay it off and get them off your case.

Re: Synchrony Decreased My Credit Limit

SouthJamaica — Wed, 20 Dec 2023 15:43:54 GMT

@PhilL wrote:
Across all cards?

Why would they do a closure or any adverse action if you make on-time payments?

That's a good question. No one knows why. But my theory is they do it to make their financial statements look better by decreasing loan loss reserves.

Re: Synchrony Decreased My Credit Limit

pizzadude — Wed, 20 Dec 2023 17:00:28 GMT

Lenders have various approaches to managing risk - some like Synchrony are very trigger happy and have been known to chop / shutdown accounts with no notice and / or apparent reasons.

Re: Synchrony Decreased My Credit Limit

biznob — Wed, 20 Dec 2023 17:57:59 GMT

when Covid hit they closed about 10 of my accounts. Many i didnt use. No changes to my profile, utilzation etc...

I bought a new house mid covid and used some of the funds from the sale of my prior house to pay off all debt.

When i submitted an address change request, they closed another 10 of my accounts. Most i rarely used. whats funny is i overpaid two accounts (amazon and sams) so they owed me quite a bit of money at the time as they credited the accounts due to the double payments.

No changes to my credit as i was in the closing process. My utilzation has always been 1-2%. Nothing bad, no changes in income or job, and score was going up slowly.

Anyhow, i had just recently gotten a CLI on several. I was a CLI seeking junky every 2-3 months.

I have one Synch card they didnt close (venmo). It has gotten regular CLI's without issue. I get Preapprovals all the time from anywhere i go offering synch cards. Refuse to get another synch card.

Re: Synchrony Decreased My Credit Limit

BuckyB — Wed, 20 Dec 2023 19:27:31 GMT

You had 20 Synchrony cards? 😦