Credit Limit Decrease After paying off remaining balance

[Anonymous]

My husband and I went to get my wedding rings and I we both got approved, in order to pay for the entire cost of both rings. He did not have very good credit, but was approved for $3,500, so we used about $3,100 of it. He never had a late payment and there has been ZERO change to his credit report. This all took place last in August of 2018, and 2 weeks ago we paid off the remaining balance of $2,600. Yesterday when the statement came it showed the balance being $0, but it also showed a credit limit of $300. How does it drop from $3,500 to $300 after we pay off the balance. Now we do not know what to do, should we close the account? Or do we utilize it for another purchase and continue to pay on it. We are trying to buy our 1st house and I am scared this is going to be detrimental to our plans.
Any feedback on how we should proceed would be greatly appreciative.

[Lucifer]

In '08 when things were getting rough and banks were reeling in credit lines I had a 10k card go to 500 bucks.   Never a late payment, no issues.   Sometimes it just is what it is and it sucks or something set them off but no matter.   

It's 300  CL and all good history.    Your utilixation takes a hit in the short term if you are carryong balances but in the long run it'll be ok.

[JR_TX]

If it’s Comenity then there’s no explanation nor solution. You have a choice of keeping the relationship or terminating it via “Account Closed by Consumer”.
Good Luck and Oh Welcome to the myFICO forum! Stick around and you’ll learn so much knowledge in this Credit world!

[Anonymous]

Thanks !!! I know we can get it turned around, I’m just pissed that this could deter us from our goals.

[3se7ens]

Well it looks like you were at or above 75% utilization for the first 8 months. That’s an absolute no no.
Don’t ever carry a balance of over 50% utilization for more than 1 statement, like I did, that’s when the, “red flags go up”. Barclaycard “balance chase” me from $2750 to $1000. That was 2 years ago, apparently they never forgave me for it, because I haven’t seen a CLI from them since, Though my credit file has improved dramatically.
Good Luck 😉

[Anonymous]

You hit the nail on the head!!!! Yea it is Comenity ... and thanks I’m hoping to learn as much as I can, I refuse to let our dreams get swept away over all because I have little knowledge of the credit world!

[Lucifer]

If you are looking to learn about credit then you are in the best place.

Doesn't seem like this will have any sort of real negative impact on you guys.

And for the poster that got balance chased - I hate that !    That too happened to me once years and years ago.   

[coldfusion]

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@Anonymous wrote:
You hit the nail on the head!!!! Yea it is Comenity ... and thanks I’m hoping to learn as much as I can, I refuse to let our dreams get swept away over all because I have little knowledge of the credit world!

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You got what is known as balance chased.  Comenity is notorious for doing this, and in this case it sounds like for the first 6 months after you got the card you were likely only making mininum payments and/or late payments.  That is viewed by issuers as potentially risky behavior, and given this was a new card issued with someone with a known dirty credit history it would attract their attention.   They responded by slashing your credit limit after you made that large payment in order to mitigate their risk moving forward.

If you continue to use the card and demonsrate a good payment history they may gradually restore at least some of the limit, or you can choose to sockdrawer the card until you've held it for 12 months and then close it. 

[Lemark]

Retail store banks such as Comenity are known for these practices. They manage so many accounts and shift limits around since they are limited on credit they can offer to consumers. I'll say keep open since it may increase but keep in mind the can also abruptly shut down or close from non-use. Recently , the closed Zgallery card abruptly. I think it mostly business decision as to what makes them profit or serves them better. For the sake of having large credit lines I usally recommend fewer store cards.Multiple payment increase credit score but not sure cards use to you anymore but I don't know find something small to purchase to keep buy/pay going. All the best on home search!

[Anonymous]

Thank you! I was leaning toward keeping it open and purchasing something and paying it off over time, but in the heat of the moment my 1st instinct was to cancel the card! Thanks so much all of the advice so far has been awesome, much gratitude to you all!