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So, I am new to this in the US and frankly never been in this situation.
I have around 3 credit cards, 2 of which i use but make full payments on them when due.
I have never had loans or been in debt - have always made payments on time or, in this case, more than the minimum payment every month.
I have my own business and pay yearly taxes to IRS. The amount of taxes are high so naturally I applied for an AMEX 0% interest (for 15 months I think) blue plus card and paid the IRS using that and then I make monthly payments to the card.
The following year I did the same, but paying off both cards at the same time. The first one, I just finished paying off. The first card I got 3 years ago and the 2nd card the year after. Each card had around 11-13K on them.
Same situation again this year. Except I applied for the card and found my credit limit is 2K! On my other cards, it is 20K (twenty).
I also applied for a personal card from AMEX too (one of the airlines) and was surprised the credit limit was 4K as usually I get a high credit limit and always pay on time etc...
am I confused and at a loss on why this has happend and what to do?
my score is 720 (it used to be higher and have had a couple of hard enquiries in the last year).
Is it better to close the cards I am not using? or keep them open?
How best can I get out of this situation since I do need as much credit as I can get (of course, being responsible!) in order to continue to pay IRS taxes in full but put it on the credit card(s) in future with the 0% interest options. I also, needless to say, want to make sure that for my personal credit and future applications for whatever, is good and is not compromised because of this.
Does opening a new account every year increase the chance of lowering the credit limit? How can I increase it (without requesting for increase) by default or get a higher limit by default?
What about increasing the credit score quickly?
Again - never had late payments. AMEX had 1 issue a few months ago where auto pay got disabled/turned off and they called me. They confirmed and also waived the late payment fee and I paid more than the amount due and everything has been in good standing so I shouldn't be penalized for a mistake on their end. I found out that the 2nd card I applied for, last year, had its 0% offer receeded because of this, and didnt know until I called up today to ask a few questions in the new card I received and its credit limit.
Any help and advice is appreciated. I am actually panicking and freaking out. I have never had this issue before and I am learning. In the UK, where I am from, my credit rating is excellent.
Again, never had any late payments or missed any payments so I am puzzled by this and clearly missing something.
Thank you
Welcome to the forums.
It appears to me you have three possible issues, and some recommended steps.
Mid-way through you mention a late payment. With US credit cards, and AMEX in particular it has been my experience that it is very important to read the monthly statement, reconcile how the current balance got where it is, and ensure that the bank is still on track to take the next autopayment amount. Most months, this is a boring routine, but it is necessary. Along with that there are notifications you can set up, so you get a confirmation from AMEX as key steps are reached, or not reached as in "no payment received".
Having said that, unfortunately you already have a missed payment with AMEX, and from reports of others, that will make them wary of you for a while. The bank may waive the late fee, but ultimately it is on us as customers to ensure our end of the bargain, on time payment, is completed.
The other possibility is, it sounds like you have set up a pattern of just using the cards for a one-time financing step. For 0% interest. AMEX makes money off of swipe fees as well, and if the cards aren't used elsewhere they aren't really getting much income off of you.
This pattern of apps leads to the third possible reason: your total credit limit exposure with AMEX. If you have two cards each with $20k limits, you were at $40k aggregate limits already before card 3. Expecting another $20k limit would put you at $60k total limits. Each bank has a total credit limit they are comfortable with, then you start getting denials or having to reallocate credit limits.
What type of AMEX cards are these? EveryDay? BluesCash? Business cards?
Thank you all for your kind and informative responses!
I do have a chase united mileageplus card also and a chase business unlimted ink card too (and of course, debit cards).
The missed payment had nothing to do from my end - this was down to the AMEX's end where their systems turned off autopay a few months ago due to some glitch in their systems. Their rep called me asking as to why the payment was not taken and if I want to make the payment over the phone.
After investigating whilst on the phone, they said that there was some issue in their systems and that they will waive the fee. I also made more than the minimum payment due at the same too too.
I have the AMEX business blue plus cards for the payments I use to make to the IRS.
I also have a platinum charge card. I pay the platinum charge card and my chase united mileage plus card payments in full every month.
So, thanks to the link to the CLI thread/tips - I was able to transfer credit from one of the AMEX business cards to the new AMEX business card. It worked instantly!
Now, what does this mean overall? Can I do this again and again even on new cards from AMEX, should the credit limit be low to begin with?
I also did request a CLI within 3 weeks of applying for the new credit cards (The AMEX business card but also the AMEX Delta skymiles platinum card) - this probably explains the denial of CLI but still has other questions in mind if the decision of denying was not solely due to the timeframe of applying for a CLI within weeks of getting the new cards.
so with the credit transfer, does the stay on the card "permenantly" to the card I transferred it to? or only for a short period of time?
And moving forward - since I need to do this again next year (applying for a new credit card from AMEX for the business due to the 0% interest offer for 15 months), what should I do from now, until then, to get a higher credit by default? What guidence can you give?
And also from now until the next few months, what about increasing my credit score? What advice can be given, besides not applying for new cards and paying the card statemens on time (with the exception of the business one since I cannot pay that in full but only the minimum payment + $200)
This is also interesting:
This pattern of apps leads to the third possible reason: your total credit limit exposure with AMEX. If you have two cards each with $20k limits, you were at $40k aggregate limits already before card 3. Expecting another $20k limit would put you at $60k total limits. Each bank has a total credit limit they are comfortable with, then you start getting denials or having to reallocate credit limits.
So even if say, I dont use the full line of credit on a card, they still deem me as a risky individual because I have another card with 20K limit?
In such a case, what is the best thing to remove myself from being risky but have a higher chance of a high credit limit the next time I apply for a card?
I also find this interesting:
This pattern of apps leads to the third possible reason: your total credit limit exposure with AMEX. If you have two cards each with $20k limits, you were at $40k aggregate limits already before card 3. Expecting another $20k limit would put you at $60k total limits. Each bank has a total credit limit they are comfortable with, then you start getting denials or having to reallocate credit limits.
So does that mean that because I had 20K credit, and another 20K in another card, I applied for another card and they gave it lower to me because I could be deemed risky? Even if I dont use the full credit limit on the other cards?
So moving forward, what is the best way to be taken out of the risky category? I wouldn't be able to close a card because then I'd get hit on the credit score, right?
@Anonymous wrote:Thank you all for your kind and informative responses!
I do have a chase united mileageplus card also and a chase business unlimted ink card too (and of course, debit cards).
The missed payment had nothing to do from my end - this was down to the AMEX's end where their systems turned off autopay a few months ago due to some glitch in their systems. Their rep called me asking as to why the payment was not taken and if I want to make the payment over the phone.
After investigating whilst on the phone, they said that there was some issue in their systems and that they will waive the fee. I also made more than the minimum payment due at the same too too.
I have the AMEX business blue plus cards for the payments I use to make to the IRS.
I also have a platinum charge card. I pay the platinum charge card and my chase united mileage plus card payments in full every month.
While it may be difficult to get ahead of 2020 tax filing if you are making payments against tax debt from 2019 during this 2020 calendar year, but I have to ask the question why are you not making estimated tax payments throughout the year so that come tax time you owe much less or nothing at all?
I've been self employed for a very long time and had my own experience with struggling at tax time in the past for lack of paying estimated payments throughout the tax year but once you are on the other side, tax time has much less anxiety unless your income has a dramatic increase year over year.... which you can still adjust your estimated payments in for if you incur significant increase in income.
Very good question and point!
Unfortunately have had some personal circumstances that I've had to deal with so was not able to put aside what my estimate would be for the tax returns. Plus still transitioning over to the US from the UK and it's costly. But as I am learning the systems here and the cost of things etc... I am almost getting there. I am hoping to pay off the 10K left on the card this year as I just secured other work which will help pay it of in 2-3 months once I get the payments coming through.
@Anonymous wrote:So, I am new to this in the US and frankly never been in this situation.
I have around 3 credit cards, 2 of which i use but make full payments on them when due.
I have never had loans or been in debt - have always made payments on time or, in this case, more than the minimum payment every month.
I have my own business and pay yearly taxes to IRS. The amount of taxes are high so naturally I applied for an AMEX 0% interest (for 15 months I think) blue plus card and paid the IRS using that and then I make monthly payments to the card.
The following year I did the same, but paying off both cards at the same time. The first one, I just finished paying off. The first card I got 3 years ago and the 2nd card the year after. Each card had around 11-13K on them.
Same situation again this year. Except I applied for the card and found my credit limit is 2K! On my other cards, it is 20K (twenty).
I also applied for a personal card from AMEX too (one of the airlines) and was surprised the credit limit was 4K as usually I get a high credit limit and always pay on time etc...
am I confused and at a loss on why this has happend and what to do?
my score is 720 (it used to be higher and have had a couple of hard enquiries in the last year).
Is it better to close the cards I am not using? or keep them open?
How best can I get out of this situation since I do need as much credit as I can get (of course, being responsible!) in order to continue to pay IRS taxes in full but put it on the credit card(s) in future with the 0% interest options. I also, needless to say, want to make sure that for my personal credit and future applications for whatever, is good and is not compromised because of this.
Does opening a new account every year increase the chance of lowering the credit limit? How can I increase it (without requesting for increase) by default or get a higher limit by default?
What about increasing the credit score quickly?
Again - never had late payments. AMEX had 1 issue a few months ago where auto pay got disabled/turned off and they called me. They confirmed and also waived the late payment fee and I paid more than the amount due and everything has been in good standing so I shouldn't be penalized for a mistake on their end. I found out that the 2nd card I applied for, last year, had its 0% offer receeded because of this, and didnt know until I called up today to ask a few questions in the new card I received and its credit limit.
Any help and advice is appreciated. I am actually panicking and freaking out. I have never had this issue before and I am learning. In the UK, where I am from, my credit rating is excellent.
Again, never had any late payments or missed any payments so I am puzzled by this and clearly missing something.
Thank you
Sounds like you got business cards then added personal cards. Remember even though business cards dont report to your credit report , the limits DO count toward overall Amex credit exposure. Instead of trying to open a card everytime you need to pay taxes, try building up credit limit on one card that way its essier to maintain . I also agree, branch out to other lenders for more diversity