topic Re: Big CC payment made but huge credit limit decrease WHY in Credit Cards

Big CC payment made but huge credit limit decrease WHY

4drules — Mon, 03 Mar 2014 05:15:07 GMT

I have recently been thinking of how to make the best decision for having emergency funds for me and my wife just in case. Reason being is that we are expecting our first child this month and want to have the funds in case of the unexpected. We recently figured that it would be best to pay down one of my credit cards that has a high balance and rely on the available credit for those funds. Well here goes, I have a credit card that has $8,300 credit limit with $8,050 balance and with our tax returns we made a $6,000 payment and literally the next day we get an email stating that the credit limit has been revised and when I checked it my heart sunk. The credit limit had dropped from the original $8,300 when opened to $2,086 right after they recieved the huge payment leaving us with a $36 available credit. I have already beat myself up thinking I screwed up but never thought this could happen, I figured I could drop my debt % ratio dramitically but now this basically made it the same as it was before, it should have went from 56% to 39% but now it would go to only 46%. I mean I feel like I should have just paid off another loan I had which is an installment loan and would have gotten alot extra $ monthly banked instead of only lowering my payments, or even a freaking secured credit card and atleast have that available credit but I just feel blah right now because if I call the company in 30-40 days and ask them to review my account and to reinstate my credit line to a higher one my credit would not allow because the credit limit decrease was literally $5,964 of the $6,000 payment. What are ya'll thought's and have you ever seen this big of a decrease with such a payment. I will add that when I applied for this citi simplicity card my credit was 756 and right this moment is 669.

Re: Big CC payment made but huge credit limit decrease WHY

09Lexie — Mon, 03 Mar 2014 05:19:53 GMT

@4drules wrote:
I have recently been thinking of how to make the best decision for having emergency funds for me and my wife just in case. Reason being is that we are expecting our first child this month and want to have the funds in case of the unexpected. We recently figured that it would be best to pay down one of my credit cards that has a high balance and rely on the available credit for those funds. Well here goes, I have a credit card that has $8,300 credit limit with $8,050 balance and with our tax returns we made a $6,000 payment and literally the next day we get an email stating that the credit limit has been revised and when I checked it my heart sunk. The credit limit had dropped from the original $8,300 when opened to $2,086 right after they recieved the huge payment leaving us with a $36 available credit. I have already beat myself up thinking I screwed up but never thought this could happen, I figured I could drop my debt % ratio dramitically but now this basically made it the same as it was before, it should have went from 56% to 39% but now it would go to only 46%. I mean I feel like I should have just paid off another loan I had which is an installment loan and would have gotten alot extra $ monthly banked instead of only lowering my payments, or even a freaking secured credit card and atleast have that available credit but I just feel blah right now because if I call the company in 30-40 days and ask them to review my account and to reinstate my credit line to a higher one my credit would not allow because the credit limit decrease was literally $5,964 of the $6,000 payment. What are ya'll thought's and have you ever seen this big of a decrease with such a payment. I will add that when I applied for this citi simplicity card my credit was 756 and right this moment is 669.

Sounds like you are being balance chased by Citi. How long have you been carrying the balance?

Re: Big CC payment made but huge credit limit decrease WHY

toppers555 — Mon, 03 Mar 2014 05:25:42 GMT

@09Lexie wrote:
@4drules wrote:
I have recently been thinking of how to make the best decision for having emergency funds for me and my wife just in case. Reason being is that we are expecting our first child this month and want to have the funds in case of the unexpected. We recently figured that it would be best to pay down one of my credit cards that has a high balance and rely on the available credit for those funds. Well here goes, I have a credit card that has $8,300 credit limit with $8,050 balance and with our tax returns we made a $6,000 payment and literally the next day we get an email stating that the credit limit has been revised and when I checked it my heart sunk. The credit limit had dropped from the original $8,300 when opened to $2,086 right after they recieved the huge payment leaving us with a $36 available credit. I have already beat myself up thinking I screwed up but never thought this could happen, I figured I could drop my debt % ratio dramitically but now this basically made it the same as it was before, it should have went from 56% to 39% but now it would go to only 46%. I mean I feel like I should have just paid off another loan I had which is an installment loan and would have gotten alot extra $ monthly banked instead of only lowering my payments, or even a freaking secured credit card and atleast have that available credit but I just feel blah right now because if I call the company in 30-40 days and ask them to review my account and to reinstate my credit line to a higher one my credit would not allow because the credit limit decrease was literally $5,964 of the $6,000 payment. What are ya'll thought's and have you ever seen this big of a decrease with such a payment. I will add that when I applied for this citi simplicity card my credit was 756 and right this moment is 669.
Sounds like you are being balance chased by Citi. How long have you been carrying the balance?

+1 if you have had balance for a while and have only been making min payment makes you look very risky. Also ig you credit score dropped by almost 100 points I am assuming it may be something on your CR they may not like, such as high balances with other Creditors, and history of those balances.

Re: Big CC payment made but huge credit limit decrease WHY

SunriseEarth — Mon, 03 Mar 2014 05:45:45 GMT

@4drules wrote:
I have recently been thinking of how to make the best decision for having emergency funds for me and my wife just in case. Reason being is that we are expecting our first child this month and want to have the funds in case of the unexpected. We recently figured that it would be best to pay down one of my credit cards that has a high balance and rely on the available credit for those funds. Well here goes, I have a credit card that has $8,300 credit limit with $8,050 balance and with our tax returns we made a $6,000 payment and literally the next day we get an email stating that the credit limit has been revised and when I checked it my heart sunk. The credit limit had dropped from the original $8,300 when opened to $2,086 right after they recieved the huge payment leaving us with a $36 available credit. I have already beat myself up thinking I screwed up but never thought this could happen, I figured I could drop my debt % ratio dramitically but now this basically made it the same as it was before, it should have went from 56% to 39% but now it would go to only 46%. I mean I feel like I should have just paid off another loan I had which is an installment loan and would have gotten alot extra $ monthly banked instead of only lowering my payments, or even a freaking secured credit card and atleast have that available credit but I just feel blah right now because if I call the company in 30-40 days and ask them to review my account and to reinstate my credit line to a higher one my credit would not allow because the credit limit decrease was literally $5,964 of the $6,000 payment. What are ya'll thought's and have you ever seen this big of a decrease with such a payment. I will add that when I applied for this citi simplicity card my credit was 756 and right this moment is 669.

First, congrats to you and your DW on expecting your first child! Parenting is a very good motivation to ensure that you are prepared for a rainy day.

And yes, you are definitely getting balance chased by Citi. Since the CC had a 97% UTIL, you were getting dinged for it being maxed out and for it's effect on your overall UTIL. I would call in once you can and see if they can reconsider their decision to CLD. You should also take steps to lower your UTIL with other lenders to prevent them from taking AA. This is a frustrating event, but with time and a good plan, scores will rebound and you'll definitely be able to use credit as a "rainy day" backup again.

Re: Big CC payment made but huge credit limit decrease WHY

4drules — Mon, 03 Mar 2014 07:52:32 GMT

@09Lexie wrote:
@4drules wrote:
I have recently been thinking of how to make the best decision for having emergency funds for me and my wife just in case. Reason being is that we are expecting our first child this month and want to have the funds in case of the unexpected. We recently figured that it would be best to pay down one of my credit cards that has a high balance and rely on the available credit for those funds. Well here goes, I have a credit card that has $8,300 credit limit with $8,050 balance and with our tax returns we made a $6,000 payment and literally the next day we get an email stating that the credit limit has been revised and when I checked it my heart sunk. The credit limit had dropped from the original $8,300 when opened to $2,086 right after they recieved the huge payment leaving us with a $36 available credit. I have already beat myself up thinking I screwed up but never thought this could happen, I figured I could drop my debt % ratio dramitically but now this basically made it the same as it was before, it should have went from 56% to 39% but now it would go to only 46%. I mean I feel like I should have just paid off another loan I had which is an installment loan and would have gotten alot extra $ monthly banked instead of only lowering my payments, or even a freaking secured credit card and atleast have that available credit but I just feel blah right now because if I call the company in 30-40 days and ask them to review my account and to reinstate my credit line to a higher one my credit would not allow because the credit limit decrease was literally $5,964 of the $6,000 payment. What are ya'll thought's and have you ever seen this big of a decrease with such a payment. I will add that when I applied for this citi simplicity card my credit was 756 and right this moment is 669.
Sounds like you are being balance chased by Citi. How long have you been carrying the balance?

I applied and got the approval back in July of 2012 with an introductory APR of 0% for the first 18 month's and had been carrying a high balance almost all this time and figured since the interest was gonna start kicking in to pay down a majority of the balance.

Re: Big CC payment made but huge credit limit decrease WHY

4drules — Mon, 03 Mar 2014 08:03:43 GMT

@SunriseEarth wrote:

First, congrats to you and your DW on expecting your first child! Parenting is a very good motivation to ensure that you are prepared for a rainy day.

And yes, you are definitely getting balance chased by Citi. Since the CC had a 97% UTIL, you were getting dinged for it being maxed out and for it's effect on your overall UTIL. I would call in once you can and see if they can reconsider their decision to CLD. You should also take steps to lower your UTIL with other lenders to prevent them from taking AA. This is a frustrating event, but with time and a good plan, scores will rebound and you'll definitely be able to use credit as a "rainy day" backup again.

Thank You! What is balance chased exactly, I think i kind of follow what it means but want to clarify it for good measure? My problem is now I'm very hesitant about paying down any other cards I have which are high balances of fear of them doing this same exact thing since last year my Best Buy cc was maxed and when I paid the minimum payment and got the balance down $700 they also revised it to $500 less of the original credit limit. Almost like they are waiting for me to get it paid down so much so that they can decrease the limit.

Re: Big CC payment made but huge credit limit decrease WHY

CreditScholar — Mon, 03 Mar 2014 08:05:47 GMT

@4drules wrote:
@SunriseEarth wrote:

First, congrats to you and your DW on expecting your first child! Parenting is a very good motivation to ensure that you are prepared for a rainy day.

And yes, you are definitely getting balance chased by Citi. Since the CC had a 97% UTIL, you were getting dinged for it being maxed out and for it's effect on your overall UTIL. I would call in once you can and see if they can reconsider their decision to CLD. You should also take steps to lower your UTIL with other lenders to prevent them from taking AA. This is a frustrating event, but with time and a good plan, scores will rebound and you'll definitely be able to use credit as a "rainy day" backup again.
Thank You! What is balance chased exactly, I think i kind of follow what it means but want to clarify it for good measure? My problem is now I'm very hesitant about paying down any other cards I have which are high balances of fear of them doing this same exact thing since last year my Best Buy cc was maxed and when I paid the minimum payment and got the balance down $700 they also revised it to $500 less of the original credit limit. Almost like they are waiting for me to get it paid down so much so that they can decrease the limit.

That's exactly what balance chasing is. It probably means that they've deemed you too risky, so every time you make a payment they cut your limits. This is so you can't charge anymore.

When a lender balance-chases you, there's a good chance that they're done with you (at least for the time being). Carrying high balances for a prolonged period of time has made some suspect that you might not be able to pay off what you owe. Therefore they don't want to lend you any more money, hence balance chasing.

Re: Big CC payment made but huge credit limit decrease WHY

4drules — Mon, 03 Mar 2014 08:10:25 GMT

@toppers555 wrote:

+1 if you have had balance for a while and have only been making min payment makes you look very risky. Also ig you credit score dropped by almost 100 points I am assuming it may be something on your CR they may not like, such as high balances with other Creditors, and history of those balances.

I have since traded a truck for another one and some negative equity rolled over and I didn't tell them to limit the applications so they sent them to like 8-10 different bank lenders and I also got a dixie chopper installment loan but it got sent to only one lender and got approved so that is probably why my score plummented with the inquiries and the new debt.

Re: Big CC payment made but huge credit limit decrease WHY

SunriseEarth — Mon, 03 Mar 2014 08:55:07 GMT

@4drules wrote:
@SunriseEarth wrote:

First, congrats to you and your DW on expecting your first child! Parenting is a very good motivation to ensure that you are prepared for a rainy day.

And yes, you are definitely getting balance chased by Citi. Since the CC had a 97% UTIL, you were getting dinged for it being maxed out and for it's effect on your overall UTIL. I would call in once you can and see if they can reconsider their decision to CLD. You should also take steps to lower your UTIL with other lenders to prevent them from taking AA. This is a frustrating event, but with time and a good plan, scores will rebound and you'll definitely be able to use credit as a "rainy day" backup again.
Thank You! What is balance chased exactly, I think i kind of follow what it means but want to clarify it for good measure? My problem is now I'm very hesitant about paying down any other cards I have which are high balances of fear of them doing this same exact thing since last year my Best Buy cc was maxed and when I paid the minimum payment and got the balance down $700 they also revised it to $500 less of the original credit limit. Almost like they are waiting for me to get it paid down so much so that they can decrease the limit.

Darned if ya do, darned if you don't. IMHO, I think you're better off paying down balances and letting whatever happens happens. CLD would be preferable to them closing the account and demanding the entire balance.

Re: Big CC payment made but huge credit limit decrease WHY

Anonymous — Mon, 03 Mar 2014 10:52:35 GMT

@SunriseEarth wrote:
@4drules wrote:
@SunriseEarth wrote:

First, congrats to you and your DW on expecting your first child! Parenting is a very good motivation to ensure that you are prepared for a rainy day.

And yes, you are definitely getting balance chased by Citi. Since the CC had a 97% UTIL, you were getting dinged for it being maxed out and for it's effect on your overall UTIL. I would call in once you can and see if they can reconsider their decision to CLD. You should also take steps to lower your UTIL with other lenders to prevent them from taking AA. This is a frustrating event, but with time and a good plan, scores will rebound and you'll definitely be able to use credit as a "rainy day" backup again.
Thank You! What is balance chased exactly, I think i kind of follow what it means but want to clarify it for good measure? My problem is now I'm very hesitant about paying down any other cards I have which are high balances of fear of them doing this same exact thing since last year my Best Buy cc was maxed and when I paid the minimum payment and got the balance down $700 they also revised it to $500 less of the original credit limit. Almost like they are waiting for me to get it paid down so much so that they can decrease the limit.
Darned if ya do, darned if you don't. IMHO, I think you're better off paying down balances and letting whatever happens happens. CLD would be preferable to them closing the account and demanding the entire balance.

I agree with this. As horrible as it is to lose the available credit, you can't use it any way if the cards are near maxed out. Also if the lender isn't planning on balance chasing you yet, the longer you carry a balance, the more you're at risk for them lowering your limits as you pay them off. Still, I'd call Citi and let them know that you only carried a balance due to the 0% and that you plan on paying the card down / off more now before the interest kicks in. Hopefully they will give you at least some of your limit back.

Re: Big CC payment made but huge credit limit decrease WHY

Chris679 — Mon, 03 Mar 2014 11:49:51 GMT

Please don't hesitate to pay down other cards with high balances. Those high balances are exactly what is causing this problem for you. Call them and explain your situation.

Re: Big CC payment made but huge credit limit decrease WHY

Anonymous — Mon, 03 Mar 2014 11:56:43 GMT

4drules ,

Tough. I feel empathy for your situation. But, these people have empathy for money, and only respect money. Do not show them weakness, moneywise, or they will not respect you.

If I were you, I would call to get the decision reverted. Now, DON"T tell them what you told us. That you had some emergency funds that you decided to use to pay down your current debt and use their available credit line as an eventual emergency fund [in theory, that was good thinking, don't feel guilty for that]... NO, don't say that. With there people, and their computer records, everything you say, can and will be used against you.

Now, tell them that you are going to have a baby, THEY'LL LIKE THAT, not because they are happy for a fellow human, but because you will now be more likely to be responsible AND YET, ironically, spend more, much more than before... Remind them of all the extra expenses, in preparation, that an incoming child requires. So, you just say that you were taking advantage of the GREAT 0% interest offer they had given you. Thank them for that benefit, but say that you are very disappointed that they are punishing you for making the financially rational decision of taking advange of their great offer.

Tell them that you are about to enter a new state in your life, than now more than ever you need to have some security on what financial tools and resources you have available and that you had counted on that bank to be part of that and would like to revert this "missunderstanding" before having to look for other options... because you think they are great and blah, blah.... you chose them among your other options in the past, and would like to have them in the future of your FAMILY... blah, blah...

That's what I would do... and I would remember to instuct my child, one day, about these advantures the world of credit. A cautionary tale...

Good luck on everything!

Re: Big CC payment made but huge credit limit decrease WHY

Anonymous — Mon, 03 Mar 2014 12:04:37 GMT

You might wish to switch your future credit business to some more friendly lenders like local CUs.

There's no guarantee that CUs won't balance chase you, but they tend to have a better reputation for the way they treat their members.

Re: Big CC payment made but huge credit limit decrease WHY

jnc — Mon, 03 Mar 2014 13:51:58 GMT

This has been a big fear of mine as well.

I kept holding on to the cash instead of paying down my cards, for fear they would reduce my limit.

I just finally sent a 5k payment to a card I've had maxed out for a few years. So far they haven't cut my limit but I'm still afraid it may happen at any moment.

Unfortunately for me, my cash just seemed to 'disappear' anyway so I figure I may as well get rid of some debt and have less monthly payments, even if it does mean they reduce my limits.

Sorry you got the short end of the stick on this one

Re: Big CC payment made but huge credit limit decrease WHY

Leadberry — Mon, 03 Mar 2014 14:11:07 GMT

@4drules wrote:
I have recently been thinking of how to make the best decision for having emergency funds for me and my wife just in case. Reason being is that we are expecting our first child this month and want to have the funds in case of the unexpected. We recently figured that it would be best to pay down one of my credit cards that has a high balance and rely on the available credit for those funds. Well here goes, I have a credit card that has $8,300 credit limit with $8,050 balance and with our tax returns we made a $6,000 payment and literally the next day we get an email stating that the credit limit has been revised and when I checked it my heart sunk. The credit limit had dropped from the original $8,300 when opened to $2,086 right after they recieved the huge payment leaving us with a $36 available credit. I have already beat myself up thinking I screwed up but never thought this could happen, I figured I could drop my debt % ratio dramitically but now this basically made it the same as it was before, it should have went from 56% to 39% but now it would go to only 46%. I mean I feel like I should have just paid off another loan I had which is an installment loan and would have gotten alot extra $ monthly banked instead of only lowering my payments, or even a freaking secured credit card and atleast have that available credit but I just feel blah right now because if I call the company in 30-40 days and ask them to review my account and to reinstate my credit line to a higher one my credit would not allow because the credit limit decrease was literally $5,964 of the $6,000 payment. What are ya'll thought's and have you ever seen this big of a decrease with such a payment. I will add that when I applied for this citi simplicity card my credit was 756 and right this moment is 669.

If a $6,000 payment only drops your util by 17%, are you saying you have over $35,000 in revolving debt, or does that include the installment loans?

Edit: Also, these CLD's will sometimes end in account closure after the balance is fully paid.

Re: Big CC payment made but huge credit limit decrease WHY

takeshi74 — Mon, 03 Mar 2014 14:13:27 GMT

@4drules wrote:
I mean I feel like I should have just paid off another loan I had which is an installment loan and would have gotten alot extra $ monthly banked instead of only lowering my payments

Balance chasing sucks but matters would be worse if you maintained high utilization for an even longer time.

Re: Big CC payment made but huge credit limit decrease WHY

Anonymous — Mon, 03 Mar 2014 14:18:29 GMT

@takeshi74 wrote:
@4drules wrote:
I mean I feel like I should have just paid off another loan I had which is an installment loan and would have gotten alot extra $ monthly banked instead of only lowering my payments
Balance chasing sucks but matters would be worse if you maintained high utilization for an even longer time.

Actually, because of the CLD he is going to keep having high utilization. He hasn't gained any bretheing room, because the bank cut the space he thought he was creating with the payment. If he doesn't stop this momentum, he's doomed [creditwise].

Re: Big CC payment made but huge credit limit decrease WHY

Pupeitmeister — Mon, 03 Mar 2014 15:36:45 GMT

But time heals this sort of thing. GREAT NEWS ON THE KIDDO!' Grats!!

Re: Big CC payment made but huge credit limit decrease WHY

Anonymous — Mon, 03 Mar 2014 16:11:54 GMT

Pay off your balances ASAP. The balance chasing is going to continue until your balances reaches 0 and they will most likely close the account.

Then give it a couple of months and then apply for new credit cards.

Re: Big CC payment made but huge credit limit decrease WHY

HiLine — Mon, 03 Mar 2014 16:38:55 GMT

@Anonymous wrote:
Pay off your balances ASAP. The balance chasing is going to continue until your balances reaches 0 and they will most likely close the account.

Then give it a couple of months and then apply for new credit cards.

If it were that easy he would have done it a while ago.