topic Re: Penfed lowering credit limits? in Credit Cards

Penfed lowering credit limits?

tehdrizzle — Sat, 07 Sep 2024 17:12:59 GMT

My Wife and I typically only use our PenFed cards once per year when we are on vacation and pay them off in full the following month upon our return.

We have a balance from about 6 months ago on our Best Buy card since we took advantage of a promotional 12 months of zero interest for new TV's during a garage and shop remodel. We planned on paying it off in full on month 11 to avoid any interest. Our credit scores are all 830-840, and our total utilization was at 3%. We gross 230k per year and have 1 vehicle loan, and 1 mortgage in addition to the balance on our Best Buy card.

We needed to make a purchase of $1500 while on vacation and apparently both our "Powercash Rewards" and "Gold Card" had been reduced from their original limits of 12.5k on the Powercash and 17.5k on the Gold Card down to $500 on each.

I called Penfed and they informed me that the power cash had been reduced due to inactivity on the card. The gold card was subsequently reduced due to a sudden increase in utilization which was clearly from the reduction on the power cash card.

Needless to say, we Are closing both accounts as these types of games do not bode well with us. The rep tried to encourage me to use the cards each month and request a CLI, but stated they will reduce credit limits if the cards are not used often.

Has anyone else experienced this issue? Penfed used to be a good place, but it seems they have gone a bit shady lately.

I went to my local credit union and requested an increase to offset these cards and they instantly increased my credit limit from 20k to 50k.

Sorry for the long post and I appreciate you reading this.

Re: Penfed lowering credit limits?

Kforce — Sat, 07 Sep 2024 17:37:32 GMT

@tehdrizzle wrote:

Needless to say, we Are closing both accounts as these types of games do not bode well with us.
The rep tried to encourage me to use the cards each month and request a CLI, but stated they
will reduce credit limits if the cards are not used often.

Has anyone else experienced this issue?
Penfed used to be a good place, but it seems they have gone a bit shady lately.

Amex played more than a few games with me and I closed my card's with them.

Don't have Penfed.

A lot of good credit unions and banks that will let you keep CL even with

minimum, just keep alive spend.

800+ Ficos, 3% - Util, good income, like you said "Games".

Walk away and don't look back.

You don't need either card.

Re: Penfed lowering credit limits?

coldfusion — Sat, 07 Sep 2024 17:41:14 GMT

Nothing unusual especially in these times for an issuer to decrease limits on cards that aren't used. The size of the cash reserves they're legally required to maintain as a buffer against card defaults is in part directly related to the overall amount of credit limit they extend across all cards issued, and while different issuers have different tolerance levels a card that goes unused for a period of time becomes at risk for a CLD or even a closure. There's only so much of an opportunity cost they're willing to carry for an unprofitable client. Sorry to read that this happened to you, but nowadays this is a reality.

Synchrony Bank is probably the poster child for doing this but they are absolutely not the only issuer that does it.

Re: Penfed lowering credit limits?

NoMoreE46 — Sat, 07 Sep 2024 21:01:22 GMT

@tehdrizzle wrote:
My Wife and I typically only use our PenFed cards once per year when we are on vacation and pay them off in full the following month upon our return.

We have a balance from about 6 months ago on our Best Buy card since we took advantage of a promotional 12 months of zero interest for new TV's during a garage and shop remodel. We planned on paying it off in full on month 11 to avoid any interest. Our credit scores are all 830-840, and our total utilization was at 3%. We gross 230k per year and have 1 vehicle loan, and 1 mortgage in addition to the balance on our Best Buy card.

We needed to make a purchase of $1500 while on vacation and apparently both our "Powercash Rewards" and "Gold Card" had been reduced from their original limits of 12.5k on the Powercash and 17.5k on the Gold Card down to $500 on each.

I called Penfed and they informed me that the power cash had been reduced due to inactivity on the card. The gold card was subsequently reduced due to a sudden increase in utilization which was clearly from the reduction on the power cash card.

Needless to say, we Are closing both accounts as these types of games do not bode well with us. The rep tried to encourage me to use the cards each month and request a CLI, but stated they will reduce credit limits if the cards are not used often.

Has anyone else experienced this issue? Penfed used to be a good place, but it seems they have gone a bit shady lately.

I went to my local credit union and requested an increase to offset these cards and they instantly increased my credit limit from 20k to 50k.

Sorry for the long post and I appreciate you reading this.

CLD to the same $500 also had happened to this user (Message #13)

Re: PenFed inactivity offer - myFICO® Forums - 6784655

Re: Penfed lowering credit limits?

tehdrizzle — Sat, 07 Sep 2024 18:40:24 GMT

@coldfusion That's wild. Synchrony has been very generous with CLI's on our Lowes card. We went from 10k to 35k in 1 year. We very rarely use that card.

Re: Penfed lowering credit limits?

CreditCuriosity — Sat, 07 Sep 2024 18:46:11 GMT

Interesting. Didn't know CU typically are doing this especially PenFed. Just checked mine is still at 30k but suppose could happen to me as only use it a few times a year to keep it active. Sorry has happened to you

Re: Penfed lowering credit limits?

MissLiz — Sat, 07 Sep 2024 19:14:12 GMT

Wow, I'm sorry that happened to you. Seems like they would have at least given you a heads up.

Re: Penfed lowering credit limits?

Gregory1776 — Sat, 07 Sep 2024 20:53:35 GMT

I bet ya they'd hard pull ya too eh?? 🥴

Re: Penfed lowering credit limits?

tehdrizzle — Sat, 07 Sep 2024 21:28:05 GMT

@Gregory1776 yes sir, They confirmed it of course would be a hard pull. PenFed has always been good, but it seems like they are changing their practices which is sad.

Re: Penfed lowering credit limits?

creditrizz — Sat, 07 Sep 2024 22:26:13 GMT

I find PenFed to be more of a hassle the more I deal with them. Decreasing a credit line is one thing, but down to $500 is pretty ridiculous. They may as well just close it since that's what I'd do if they dropped my limit like that anyway.

Re: Penfed lowering credit limits?

7774x — Sat, 07 Sep 2024 22:57:05 GMT

@creditrizz wrote:
I find PenFed to be more of a hassle the more I deal with them. Decreasing a credit line is one thing, but down to $500 is pretty ridiculous. They may as well just close it since that's what I'd do if they dropped my limit like that anyway.

Penfed still recovering from losses in last year .. this year better results... In past 3 years ,Penfed was very generous with Ccs,CLI ,Auto loans . personal loans . except now slowing economy leaves them exposed for more losses ,,That is business ... I have 8 CC I make sure to use them several times a year for each card . no CLDs .. so far

Re: Penfed lowering credit limits?

7774x — Sat, 07 Sep 2024 22:59:26 GMT

@creditrizz wrote:
I find PenFed to be more of a hassle the more I deal with them. Decreasing a credit line is one thing, but down to $500 is pretty ridiculous. They may as well just close it since that's what I'd do if they dropped my limit like that anyway.

Penfed saying if you don't use their high CL Ccs .. they don't want your business .. tough to hear ....you can always close account

Re: Penfed lowering credit limits?

tehdrizzle — Sat, 07 Sep 2024 23:33:45 GMT

That's exactly what we are doing. Any credit union that plays these kind of games doesn't deserve business.

Re: Penfed lowering credit limits?

tehdrizzle — Sat, 07 Sep 2024 23:34:39 GMT

That's exactly what we are doing.

Re: Penfed lowering credit limits?

Alucard — Sun, 08 Sep 2024 05:07:19 GMT

the same thing happened to me, literally today! 5k down to $500.

Re: Penfed lowering credit limits?

NoMoreE46 — Sun, 08 Sep 2024 13:16:42 GMT

@Alucard wrote:
the same thing happened to me, literally today! 5k down to $500.

Do you recall the last time this card was used @Alucard ?

Re: Penfed lowering credit limits?

creditrizz — Sun, 08 Sep 2024 21:11:49 GMT

@7774x wrote:
@creditrizz wrote:
I find PenFed to be more of a hassle the more I deal with them. Decreasing a credit line is one thing, but down to $500 is pretty ridiculous. They may as well just close it since that's what I'd do if they dropped my limit like that anyway.

Penfed saying if you don't use their high CL Ccs .. they don't want your business .. tough to hear ....you can always close account

Who said their limits are even that high? I have over 5x my penfed card limits on other individual cards of mine and they're from banks that actully have functioning websites that aren't built on Salesforce. PenFed should just close the cards instead of making us waste our time to call in to close a card with a useless reduced limit.

Re: Penfed lowering credit limits?

Marq628 — Tue, 10 Sep 2024 21:17:13 GMT

They just did the same thing to me. I probably used the card once this year back in January but recently I let my daugter use it to take my grandkids to Sesame Place. When I logged in to pay the balance, I saw my limit was reduced to $600 from 15k which made the card maxed out because my daughter spent over $500 on the card. Needless to say I closed the account.

Re: Penfed lowering credit limits?

NoMoreE46 — Tue, 10 Sep 2024 22:17:38 GMT

Thanks for providing more data points @Marq628 about this.

@Marq628 wrote:
They just did the same thing to me. I probably used the card once this year back in January but recently I let my daugter use it to take my grandkids to Sesame Place. When I logged in to pay the balance, I saw my limit was reduced to $600 from 15k which made the card maxed out because my daughter spent over $500 on the card. Needless to say I closed the account.

Re: Penfed lowering credit limits?

creditrizz — Wed, 11 Sep 2024 04:23:36 GMT

They should have at least had the integrity to email you and let you know it was decreased so that you don't overspend on it. Discover lowered mine from about 10k to 8.5k once, but emailed to let me know. This was because I had charged a transaction of over 90% of the CL to one of my other cards before I knew that was something you shouldn't do. Just checked my two penfed cards and they hadn't messed with the limits yet. Both were used in the past few months but mostly small transactions since their rewards are not competitive to my leading cards. I'll put them both in Apple pay and see if small transactions keep them alive. If not, F' em. I have a US Bank card I haven't used in like 5 years and they never decreased the limit on that one. I just now put a coffee on it and got a dormant card resurrection alert from Credit Karma.