Discover lowered my limit——UPDATE

[icyhot]

I had a $5500 limit with a $2685 balance transfer and they lowered my limit to $2900. My utilization is already through the roof, over 60%, so I'm thinking about just closing it. I feel like the more I pay it off the more they'll lower it

*************UPDATE***************

Well, it’s been a few months since I’ve posted and I took everyone’s advice into consideration. I spoke with a bankruptcy attorney and she pretty much assured me that, based on my income, household size and amount of debt, I was pretty much a prime candidate for bankruptcy. As I had stated before in the thread, I anticipated getting a new job with a substantially higher income, and I did. I’m making about $57,000 a year now in the field I love, with more room for growth. I have an open case and am sending in my documents tomorrow. I still haven’t begun the proceedings, but I can say that every single account I have, with the exception of my Amex Green, is completely maxed over the limit and past due. Unfortunately I had to continue to pay all my bills with the cards until I finally got a stable income. I’m hoping with my new income I’m still able to file a chapter 7, especially since I’m a single mom and don’t really have room to make bankruptcy payments. My goal is to have the debts discharged, be able to begin saving aggressively, get a secured Wells Fargo (my bank) card, and just pay everything in cash. My Amex green helps with floating purchases but I’m sure once the BK hits my credit that’ll be AXed. I will continue to update 

[Anonymous]

How many other cards do you have and are you at 60% utilization across all your TLs?

If so, you're a target for AA for sure.  Discover and Capital One just reported to the media that they had way higher than expected charge-offs and are obviously tightening down on high risk individuals.

Don't go over 30% utilization on any card, and don't go over that on all of them.  60% is very high risk to banks.

[Anonymous]

Sorry to hear about you getting CLD. Maybe this is something they will work with you on and you can have your original limit restored. Have you tried contacting Discover yet?

[K-in-Boston]

Balance chasing is never pleasant but it does happen if you scare a lender.  Have your scores also taken a nosedive?  Has your overall util increased to over 60% since opening the card?  Quick estimation from your signature puts that at $40k of revolving debt; what was it when you opened the account?  Most lenders that do balance chasing will reverse themselves once your credit profile trends the other direction.

[Anonymous]

See if you can work with Discover to get your original limit restored. Also, do what you can to get both your overall utilization and your utilization on each card back down again, aim for the magic 30% mark. Like K says, lenders will be more forgiving if they see that you're working to get your utilization back under control even if you can't hit the 30% mark right away.

[Anonymous]

Discover and Capital One News:

https://www.bloomberg.com/news/articles/2017-04-26/surprise-surge-in-soured-card-loans-sinks-capital...

I would expect them to decrease risky or unused CL's.

[Anonymous]

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@Anonymous wrote:

Discover and Capital One News:

https://www.bloomberg.com/news/articles/2017-04-26/surprise-surge-in-soured-card-loans-sinks-capital-one-discover

I would expect them to decrease risky or unused CL's.

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Like I said in Credit in the News just now, a lot of people have been wondering what's up with all the AA's lately, and I think now we know why.

[RockinRay]

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@Anonymous wrote:

Discover and Capital One News:

https://www.bloomberg.com/news/articles/2017-04-26/surprise-surge-in-soured-card-loans-sinks-capital-one-discover

I would expect them to decrease risky or unused CL's.

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+1 - I have also read that consumer credit card debt is at an all time high. So, I would expect to see more of this happening.

[icyhot]

My overall credit and utilization was great when I was approved, now not so much. I wanna say of the 10 cards I have open, including discover, 5 of them are over 60% UTL, including my $21.5K QS. Not to mention I have a 10K valance on a closed card. My overall financial situation is impeding me from making anything more than minimums on any card, I'm working on changing that. I wasn't too shocked when I saw it

[Anonymous]

That $10k balance on a closed card shows infinite utilization -- $10,000/$0.  That's probably the worst AA trigger -- not just being over limit but having a limit on a $0 TL.

Chances are if you pay everything down well you can recon some of your lost CLs if the accounts are still open.  On the other hand, if you don't get those utilizations down, they will chase your balance down with CLDs and it'll keep your utilization high.

Work on your budget and cut all spending possible.  Cable TV, cell phone bill, eating out: these are all places you can temporarily halt while you get your credit back under control.