Big CC payment made but huge credit limit decrease WHY

[4drules]

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.

[09Lexie]

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@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.

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

[toppers555]

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@09Lexie wrote:

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@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.

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

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+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.

[SunriseEarth]

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@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.

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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.

[4drules]

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@09Lexie wrote:

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@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.

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

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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. 

[4drules]

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@SunriseEarth wrote:

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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.

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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.

[CreditScholar]

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@4drules wrote:

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@SunriseEarth wrote:

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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.

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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.

[4drules]

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@toppers555 wrote:

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+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.

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 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.

[SunriseEarth]

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@4drules wrote:

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@SunriseEarth wrote:

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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.

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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.

[Anonymous]

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@SunriseEarth wrote:

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@4drules wrote:

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@SunriseEarth wrote:

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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.

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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.

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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.