Penfed lowering credit limits?

[tehdrizzle]

My Wife and I typically only use our PenFed cards once per year when we are on vacation and pay them off in full the following month upon our return.

We have a balance from about 6 months ago on our Best Buy card since we took advantage of a promotional 12 months of zero interest for new TV's during a garage and shop remodel. We planned on paying it off in full on month 11 to avoid any interest. Our credit scores are all 830-840, and our total utilization was at 3%. We gross 230k per year and have 1 vehicle loan, and 1 mortgage in addition to the balance on our Best Buy card.

We needed to make a purchase of $1500 while on vacation and apparently both our "Powercash Rewards" and "Gold Card" had been reduced from their original limits of 12.5k on the Powercash and 17.5k on the Gold Card down to $500 on each.

I called Penfed and they informed me that the power cash had been reduced due to inactivity on the card. The gold card was subsequently reduced due to a sudden increase in utilization which was clearly from the reduction on the power cash card.

Needless to say, we Are closing both accounts as these types of games do not bode well with us. The rep tried to encourage me to use the cards each month and request a CLI, but stated they will reduce credit limits if the cards are not used often.

Has anyone else experienced this issue? Penfed used to be a good place, but it seems they have gone a bit shady lately.

I went to my local credit union and requested an increase to offset these cards and they instantly increased my credit limit from 20k to 50k.

Sorry for the long post and I appreciate you reading this.

[Kforce]

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@tehdrizzle wrote:

Needless to say, we Are closing both accounts as these types of games do not bode well with us.

The rep tried to encourage me to use the cards each month and request a CLI, but stated they

will reduce credit limits if the cards are not used often.

Has anyone else experienced this issue?

Penfed used to be a good place, but it seems they have gone a bit shady lately.

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Amex  played more than a few games with me and I closed my card's with them.

Don't have Penfed.

A lot of good credit unions and banks that will let you keep CL even with

minimum, just keep alive spend. 

800+ Ficos,  3% - Util,  good income, like you said  "Games".

Walk away and don't look back.

You don't need either card.     

[coldfusion]

Nothing unusual especially in these times for an issuer to decrease limits on cards that aren't used.  The size of the cash reserves they're legally required to maintain as a buffer against card defaults is in part directly related  to the overall amount of credit limit they extend across all cards issued, and while different issuers have different tolerance levels a card that goes unused for a period of time becomes at risk for a CLD or even a closure.   There's only so much of an opportunity cost they're willing to carry for an unprofitable client.  Sorry to read that this happened to you, but nowadays this is a reality.

Synchrony Bank is probably the poster child for doing this but they are absolutely not the only issuer that does it.

[NoMoreE46]

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@tehdrizzle wrote:

My Wife and I typically only use our PenFed cards once per year when we are on vacation and pay them off in full the following month upon our return.

We have a balance from about 6 months ago on our Best Buy card since we took advantage of a promotional 12 months of zero interest for new TV's during a garage and shop remodel. We planned on paying it off in full on month 11 to avoid any interest. Our credit scores are all 830-840, and our total utilization was at 3%. We gross 230k per year and have 1 vehicle loan, and 1 mortgage in addition to the balance on our Best Buy card.

We needed to make a purchase of $1500 while on vacation and apparently both our "Powercash Rewards" and "Gold Card" had been reduced from their original limits of 12.5k on the Powercash and 17.5k on the Gold Card down to $500 on each.

I called Penfed and they informed me that the power cash had been reduced due to inactivity on the card. The gold card was subsequently reduced due to a sudden increase in utilization which was clearly from the reduction on the power cash card.

Needless to say, we Are closing both accounts as these types of games do not bode well with us. The rep tried to encourage me to use the cards each month and request a CLI, but stated they will reduce credit limits if the cards are not used often.

Has anyone else experienced this issue? Penfed used to be a good place, but it seems they have gone a bit shady lately.

I went to my local credit union and requested an increase to offset these cards and they instantly increased my credit limit from 20k to 50k.

Sorry for the long post and I appreciate you reading this.

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CLD  to the same  $500 also had happened to this user (Message  #13)

Re: PenFed inactivity offer - myFICO® Forums - 6784655

[tehdrizzle]

@coldfusion That's wild. Synchrony has been very generous with CLI's on our Lowes card. We went from 10k to 35k in 1 year. We very rarely use that card.

[CreditCuriosity]

Interesting.  Didn't know CU typically are doing this especially PenFed.   Just checked mine is still at 30k but suppose could happen to me as only use it a few times a year to keep it active.  Sorry has happened to you

[MissLiz]

Wow, I'm sorry that happened to you. Seems like they would have at least given you a heads up.

[Gregory1776]

I bet ya they'd hard pull ya too eh?? 🥴

[tehdrizzle]

@Gregory1776 yes sir, They confirmed it of course would be a hard pull. PenFed has always been good, but it seems like they are changing their practices which is sad.

[creditrizz]

I find PenFed to be more of a hassle the more I deal with them.  Decreasing a credit line is one thing, but down to $500 is pretty ridiculous.  They may as well just close it since that's what I'd do if they dropped my limit like that anyway.