Comenity / Overstock lowered my credit limit, they're cutting limits

[lucknpat]

Okay, so I broke my ankle before Christmas last year and I have a genetic disorder so I was in a wheelchair for 4 months. And I was out of work for months. So I missed a lot of payments and my credit score went down. I finally got back to work and started working with everyone to get payments sent on time but I am still utilizing a couple of my credit cards because I have one big lawsuit that I am trying to settle with. But I am no longer late and I only used about $175 of my $750 credit limit for my Overstock card. I just received a letter in the mail that said they checked my credit score and because it was bad, due the lates, utilization, to a particular card that I am on a plan to pay down with no interest or late fees and etc, they lowered my credit limit to $100!!

So now my credit score that was bad in the first place is going to tank even more now! I have been paying the bill even before it is due and I was happy to have the credit line but I am really upset about this. Apparently many others have had this happen, I saw other complaints. This is a really new credit line for me though. I think I just opened it last year. I guess they check your credit every 30 days so if you're not up to par then they cut your limit. Would experts here on the board recommend I close the account?

[pipeguy]

---

@lucknpat wrote:

Okay, so I broke my ankle before Christmas last year and I have a genetic disorder so I was in a wheelchair for 4 months. And I was out of work for months. So I missed a lot of payments and my credit score went down. I finally got back to work and started working with everyone to get payments sent on time but I am still utilizing a couple of my credit cards because I have one big lawsuit that I am trying to settle with. But I am no longer late and I only used about $175 of my $750 credit limit for my Overstock card. I just received a letter in the mail that said they checked my credit score and because it was bad, due the lates, utilization, to a particular card that I am on a plan to pay down with no interest or late fees and etc, they lowered my credit limit to $100!!

So now my credit score that was bad in the first place is going to tank even more now! I have been paying the bill even before it is due and I was happy to have the credit line but I am really upset about this. Apparently many others have had this happen, I saw other complaints. This is a really new credit line for me though. I think I just opened it last year. I guess they check your credit every 30 days so if you're not up to par then they cut your limit. Would experts here on the board recommend I close the account?

---

I would because I "strongly dislike" Comenity and refuse to do business with them. I also personally have a policy that if any card balance chases me  I close it - but I have a lot of cards and a lot of available credit limits.

Some on here will tell you to keep it open pay it properly and as you recover that card will recover through future limit increases. This may or may not happen, you'll get stories backing up both options, but for me, it comes down to the only good Comenity card is a closed Comenity card - kinda of the same value, I put on Credit One and its clones.

[Anonymous]

They did that to me on one of my cards so yeah, I'd close it. 

[Anonymous]

There are plenty of lenders that will balance chase you if they see sign of impending distress on your CR or if you have late payments, however the beauty of subprime cards is that they will lower your limit to below your current balance. Don't be surprised if they immediately close the account when it is paid off.

Comentiy, Credit One, First Premiere and the like have no place in a solid credit profile/rebuild IMO. Store card aficionados will disagree with Comenity being included, and a store card or 2 isn't the end of the world but IMO they are to be avoided.

[AverageJoesCredit]

Ok, I know the Comenity bashing will commence, and in many cases , warranted. I'm sorry to hear about your condition and what happened op but if you were making late payments not only on this account but others, you can't blame Comenity for cutting risks. Many credit card companies would do the same and they all usually sp your accounts to verify that everything looks good. They have to weigh their risk as do we . Making lates on relatively new accounts is a big no no despite the situation . I m glad you are back on your feet. Wish you the best going forward.

[FinStar]

OP, it's ultimately up to you to decide how you want to proceed. If you feel that you can eventually recover the CL down the road, sure. Otherwise, you could close it. Depends on how often you use the Overstock CC.

As @AverageJoesCredit mentioned above, the AA shouldn't be a surprise. All lenders typically SP your reports on a frequent basis and Comenity is no exception.

Also, keep in mind that the AA was a business decision and they're simply reducing the risk of default given the evidence of what was triggered by your CR and negative payment history.

[Dirge]

Amex did that to me years ago, though I wasn't behind on anything or even using my cards much. I had a card with a set limit, and I tried to buy something and it got declined. About a week later, Amex sent me a letter saying they had lowered my limit to what I owed. I will never use any Amex card again. 

[Anonymous]

Sorry for all the trouble you've had. It does appear that the missed payments were the key factor in causing the AA.

I'd close down my own Overstock card, too, if it weren't for the fact that it'd cut $7,300 off my revolving credit and I wouldn't like to lose that much at a fell swoop. However, if I can get a couple of good CLI's on bank cards over the course of this year and maybe one more decent new bank card account to keep my revolving credit total at where it is or even increase it, then I might close Overstock. I've only used it twice since last September, when they shut down the category (books/movies/media) that I previously did most of my purchase activity there in (they haven't restored it since, even though they said at the time that it'd be back after remodeling, and at this point I don't think they will), and in all truth I can purchase most of what they have that I'm interested in cheaper elsewhere, as others have pointed out.

[lucknpat]

---

@AverageJoesCredit wrote:
Ok, I know the Comenity bashing will commence, and in many cases , warranted. I'm sorry to hear about your condition and what happened op but if you were making late payments not only on this account but others, you can't blame Comenity for cutting risks. Many credit card companies would do the same and they all usually sp your accounts to verify that everything looks good. They have to weigh their risk as do we . Making lates on relatively new accounts is a big no no despite the situation . I m glad you are back on your feet. Wish you the best going forward.

---

I'm chronically ill but I do know that I messed up and it's not what I wanted to happen but I had to rest a lot because my genetic condition causes me to heal very slowly so I was laid up all day unable to work. No money unfortunately. But I have been positive for almost 5 months now and I didn't go crazy with using the credit available to me with comenity. I paid them on time, never late. But it looks like they are going to close the account probably anyways once I make my last payment. My current banks have been very understanding and worked with me to keep my accounts open and I will get a credit increase in August from Capital one. I understand that they have to minimize their risk but I haven't been late really recently, why all of a sudden. It seems like they just started doing this to like everyone for some reason. I don't have time to dwell on it though. I'm sick and just have to try to work and pay my bills. Thank you for your insight.