Big CC payment made but huge credit limit decrease WHY

[Chris679]

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.

[Anonymous]

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!

[Anonymous]

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.

[jnc]

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

[Leadberry]

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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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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.

[takeshi74]

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@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

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

[Anonymous]

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@takeshi74 wrote:

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@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

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

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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].

[Pupeitmeister]

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

[Anonymous]

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.

[HiLine]

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@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.

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