Amex chopped CL 50%

[Jnbmom]

Interesting, I have seen this mentioned a few times as of lately, just makes you think.

Now we all know it's business of course, but it kinda makes you wonder, "if" people would use their cards and let.s say have their balances go way up even close to limit, amex will get spooked, but also paying to off in a large amount will also get them spooked.

Oh the life of the credit card game

[CreditInspired]

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@Turbobuick wrote:

Recent 5 page thread on this subject was locked.

My letter reads... "the spend activity on the account listed above has been significantly lower than your credit limit." 

We've had this card a number of years and our income is stable. Most of our CL's are over 20K. Not sure what suddenly spooked Amex. My fico is 850, wife is 838. No balances.

We put thousands on the Blue Cash Everyday card last year, every year, mostly on groceries. If this card didn't suck in every catagory except grocery, we'd use it more. CL went from 24K to 12K and guess what? The 12K is going to be too large too. LOL

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Oh Yuck. Yep, I can see it happening to both my AmX cards too. I use both but no where as near the large purchases after I purchased my condo. But the good thing is my UT on these cards and across the board is extremely low so if it happpens, I’ll be okay.  

[Anonymous]

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@gdale6 wrote:
Creditors have to maintain reserves to give credit, if you are not using the high limits they are going to cut them and move them to someone who will. Its not personal but a sound business decision.

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I can definitely see it from this perspective, and I understand it. 

But on the other side of the coin, of responsible debt management, it should be encouraged not to use all of your available CL. Right?

I'm sure Amex targets big spenders, but there are a lot of people who do not use their CC for everything. They simply like having them for emergencies, or a large purchase like appliance etc. Thus choose not to carry any revolving debt. But at the same time are not PIFers.

It's nice to have a couple large CL's to help with utilization across the board as well. If they slash CL's it's a bummer for sure, but not the end of the world. I mean it's not like you'll be stuck with that lower limit forever, that's what CLI's are for. None of my Amex cards are at or even over $20K, so getting a CLD by half would seriously affect me. But I'm not about to cancel th card in an attempt to tell them off. As if..

I don't run thousands through any particular card, but there are time when I'll carry a $2-4K balance on a 0% promo APR for a few months. So having my CLs halved would impact that ability, and affect utilization.

I'm curious how those accounts in default affect their credit reserves then?

[Anonymous]

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@Anonymous wrote:

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I can definitely see it from this perspective, and I understand it. 

But on the other side of the coin, of responsible debt management, it should be encouraged not to use all of your available CL. Right?

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Not necessarily.  One can use their entire limit or several times their limit and still exhibit sound Transactor (extremely low risk) behavior so long as they're paying in full their statement balance or greater.

I see no issue with Amex slashing limits on accounts that aren't being used much (relative to the limit).  In fact, I'm sort of anticipating a $30k-$40k AA CLD at some point from them, as I use around half a percent of my 5-figure limit on a BCE that I tend to view as a nearly meaningless card at this point.

[longtimelurker]

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@Anonymous wrote:

It's nice to have a couple large CL's to help with utilization across the board as well. If they slash CL's it's a bummer for sure, but not the end of the world. I mean it's not like you'll be stuck with that lower limit forever, that's what CLI's are for.

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Consumers may like large unused CLs for utilization (well, the tiny fraction who know and care about util!) but that's not a plus for issuers!

Also, if this type of CLD is a real continuing thing, the whole CLI process will also be impacted.   They slash limits and will need good reason to increase again (and if they do, they will expect usage).

If (IF!) this happens on a large scale, people just need to adjust expectations.  "Sensible" CLs will be norm, and asking for constant CLIs will not be so successful.   And most people here could easily live within such a world ( AZEO just before important apps etc and where possible PIF the rest of the time).

[staticvoidmain]

I have an airline card, and a hotel card with Amex. I use them only to pay bills, but still, I requested CLI.

Why? Because on the months I would travel, my utilization on the card gets high, more than 30%. I mean, I cannot use the whole limit every month because, who travels every month? (personal, not business) I'd hate if they do this to me.

[Anonymous]

One data point that hasn't yet been mentioned by those that have seen Amex CLDs due to not using enough of the limit is what their "high balance" field reads on their CR.  While monthly spend is of course a factor, I would think high balance could play a role here.  For example, if someone spends $5/mo on their Amex card for 11 out of 12 months of the year, but during that one month reports a (say) $6000 balance on their $10000 limit, in theory in the last 12 months they used a large portion of their limit at least once and thus "needed it" to some degree. 

I wouldn't be surprised if Amex was looking at this field, perhaps to see if that high balance fell within a certain relatively recent time period such as the last 12 months and then compared that high balance to the limit on the card to figure a percentage.

I'd like to hear from those that received an Amex CLD and what their high balance was relative to their limit and perhaps there's a correlation to the CLD limit relative to their high balance.  It's also important to know when that high balance happened, as the older it is the less relevant it is.

EDIT:  I actually just started a thread on this subject here, as it has my wheels turning and I find it intriguing if anyone would like to participate, especially the OP of this thread turbobuick or anyone else that's experienced an Amex CLD due to low use:

https://ficoforums.myfico.com/t5/Credit-Cards/Amex-low-use-CLDs-amp-High-Balance-correlation/td-p/55...

[someone379]

Of course, AMEX would not need to look at the reported “high balance” on a credit report as they could more accurately look at how much spend is put through the card during a month... Some people pay before statements cut so the credit report may not show the true high balances. 

I do think it makes sense that they will cut back on the CL for those who don’t use their cards... On the other side of the coin, it was pretty recently they actually raised my SPG card’s CL with a near 3x increase.  It is one of my most used cards, but I did not even request the increase.

[Anonymous]

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@someone379 wrote:

Of course, AMEX would not need to look at the reported “high balance” on a credit report as they could more accurately look at how much spend is put through the card during a month... Some people pay before statements cut so the credit report may not show the true high balances. 

I do think it makes sense that they will cut back on the CL for those who don’t use their cards... On the other side of the coin, it was pretty recently they actually raised my SPG card’s CL with a near 3x increase.  It is one of my most used cards, but I did not even request the increase.

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High balance isn’t a monthly factor, it’s an all time factor, and every creditor I have that uses it puts the highest balance I’ve ever had, not the highest statement balance I’ve ever had. 

Like this example. 

That’s my June and July 2017 from my TU report for my Capital One card. Top line is reported balance, second line is scheduled payment, third line is past due amount, last line is high balance. Note that June I hit a new high balance of $1957 when my statement cut but I ended up hitting $2125 in July while only cutting a statement for $1815. 

That high balance is the same high balance to this day. 

[someone379]

Interesting, I did not know that... I done learned me somthing today!