Barclaycard Choice Privileges CLD

[Reighn9]

I have been trying to pay down my cards, dropping anything maxed out or nearly so, and cards with multiple balances, i.e. BTs, advances, or Promos, first.   My Choice card had a $2800 CL and I made a payment large enough the utilization should have dropped to around 24% for this statement,  then I could take it down more next time.  Barclaycard dropped my CL to $1050 leaving the utilzation at 70%.  Who do I call about this?  Is this normal when trying to pay down high balances?

[Anonymous]

It's very common with prime banks to do this -- it's called "balance chasing".

When you run very high utilizations or go over limit on one or many cards, banks can see this and perform an AA (adverse action) to cut your credit limits as you pay them down.

Once your overall and individual utilizations are under 30% and preferably under 10%, some banks will start offering you CLIs again.

Any new derogatories?

[AverageJoesCredit]

Barclay is keen on this recently. Yes i know all banks can and do but Sir Barclays seems to wake up drinking tea but craving coffee

[Reighn9]

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@Anonymous wrote:
It's very common with prime banks to do this -- it's called "balance chasing".

When you run very high utilizations or go over limit on one or many cards, banks can see this and perform an AA (adverse action) to cut your credit limits as you pay them down.

Once your overall and individual utilizations are under 30% and preferably under 10%, some banks will start offering you CLIs again.

Any new derogatories?

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No, I have no derogatories, no late payments, just high balances and utilization, but I have never gone over limit. I always make more than the minimum payment and sometimes more than one per month. The inquiries I have are all from car shopping, but no one sees them that way. I have been working with a financial advisor who gave me a plan of paying off/down several cards at a time and applying the freed up money to the next lowest balances. She said I would see a score increase shortly. So far I've just been losing points.

[Anonymous]

Once your utilization reports under 30% on all tradelines your score will go up for sure.  Once it's below 10% across the board, you'll get another boost.

Unfortunately, balance chasing is one way that hurts FICO scoring because your utilization never appears to drop until you've gotten it all paid off as much as possible.

This is one reason folks with great credit like to have so many credit cards without annual fees: if one or two vendors CLD, you still have breathing space for overall utilization.

Do you have any active installment loans reporting?

[CreditInspired]

More goes into scoring than than just paying down balances. What's your AAOA? What's your individual utilization for every card in your arsenal? Then, what's your overall utilization? Like ABCD said, <30%, but preferably less than <10% for maximum scoring. If the shopping was done in a consecutive 30-day period for a vehicle or even a mortgage, I thought lenders view this as 1 inquiry during a manual review. Also there is a breakdown of different utilization percentages: 1-10, 11-20, 21-30, 31-40, 41-50, 51-60, 61-70, 71-80, 81-90, 91-100+. I got this from CK last year and use it as a reference point. Hopefully, Barclays is your only card with a large balance. If, not, continue to work on getting those balances paid down as quickly as possible so no other CCCs take AA. Good luck.

[happypill]

Other than payment history, the most important factor in FICO scoring is utilization - much more important than inquiries which a lot of people focus on way too much.  Even if you've never missed a payment, high balances that stay high are an indication to banks of potential trouble.  And based on your description that you're having trouble and working with someone to help figure out how to pay your balances down, it would seem that their risk model is accurately assessing some concern in this case.

Yes, balance chasing sucks and it makes it that much more difficult to crawl out of hole, at least in terms of credit scoring.  In your case, you probably shouldn't worry about score and just focus on paying your balances down.  The longer you let high utilization linger, the riskier it will look and the more likely other lenders will follow suit.  Barclay's is very sensitive and one of the most likely to balance chase, but they aren't alone if the situation looks risky.

[Reighn9]

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@Anonymous wrote:

Once your utilization reports under 30% on all tradelines your score will go up for sure.  Once it's below 10% across the board, you'll get another boost.

Unfortunately, balance chasing is one way that hurts FICO scoring because your utilization never appears to drop until you've gotten it all paid off as much as possible.

This is one reason folks with great credit like to have so many credit cards without annual fees: if one or two vendors CLD, you still have breathing space for overall utilization.

Do you have any active installment loans reporting?

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I still have an auto loan and a personal loan. I just paid off one auto loan 4 months early and my scores dropped an average of 25 points on each CRA.
My oldest card is over 20 years, my newest account is the auto loan at 8 months making my AAoA about 7 years, yes the car shopping was done within 30 days. I engaged financial help because I recently came into some unexpected money and wanted to know the best way to use it in paying my accounts down. Which would be most beneficial to me and enable me to refinance my auto loan with another lender. I was already paying everything down slowly and utilization was dropping each month. The utilization is high on most cards, I have some between 5%-25% or less, several 50%-80%, but few over 90% because I've been trying to take care of those. It will take a lot longer to get my balances/utilization down if the CCs keep dropping limits. I don't expect another windfall for a while, I was expecting to do some good with this one. It looks like it backfired.

[sjt]

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@Reighn9 wrote:

I have been trying to pay down my cards, dropping anything maxed out or nearly so, and cards with multiple balances, i.e. BTs, advances, or Promos, first.   My Choice card had a $2800 CL and I made a payment large enough the utilization should have dropped to around 24% for this statement,  then I could take it down more next time.  Barclaycard dropped my CL to $1050 leaving the utilzation at 70%.  Who do I call about this?  Is this normal when trying to pay down high balances?

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Call the Portfolio Department of Barclays. Ask them for a restoration of your credit line.

[CreditInspired]

I agree w/Happypill. Paying down balances at this moment in time should outweigh scores. And you are wrong about your plan backfiring. Paying down your balances is always a good thing! And, it's not good to have balances on "every" card, even if it they are small balances. If you provide MyFICOers with each CC, interest rate, CL, and balance, along with the amount of money you can put toward each, we can definitely assist you with the best way of going forward.