Request credit line DECREASE: when does it make sense?

[brother7]

Under what circumstances would it make sense to request a credit line decrease?

Is there such thing as having too much available revolving credit? If so, what is the guideline to determine if one should reduce the amount of available revolving credit?

[Jnbmom]

I have never personally requested decreases, I worked hard for my limits .

i have however been denied and I suspect I may have too much avail credit (penfed cough cough) but other than them I haven't had it happened with other lenders.

If you can handle your lines and not overextend I don't see a reason to decrease, but if one has history of overextending themselves then I could very well see lowering their limits .

[SouthJamaica]

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@brother7 wrote:

Under what circumstances would it make sense to request a credit line decrease?

Is there such thing as having too much available revolving credit? If so, what is the guideline to determine if one should reduce the amount of available revolving credit?

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IMHO never.

Yes there can be such a thing as too much available revolving credit; I have been turned down by credit unions for (a) CLI's and (b) credit cards for that reason. But there's no guideline, because no 2 lenders are alike, and no 2 underwriters at the same lender are alike.

[wasCB14]

One situation where it can make sense is if you already have a lot of credit with a lender (relative to your income, that is) and want to get a new card from them, or a big CLI on another card. Requesting a CLD before applying can sometimes make it easier to get an approval.

[Anonymous]

Although I haven't personally requested a decrease, one reason could be as simple as not feeling  comfortable with the credit you have available to you for a variety of factors such as perhaps a CL someone has may not constitute in relation to their income.

[coldfusion]

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@wasCB14 wrote:

One situation where it can make sense is if you already have a lot of credit with a lender (relative to your income, that is) and want to get a new card from them, or a big CLI on another card. Requesting a CLD before applying can sometimes make it easier to get an approval.

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Ta-Da. 

Classic example used to be with Chase before they implemented their 5/24 policy across all product.  Emperical guidance was to have no more than (yearly gross income x 50% - $10K) in total aggregate limit across all Chase cards before applying for a new one so request a CLD as necessary. 

[NoMoreE46]

Or if you are OCD and have a limit of $20,300 and request the $300 to be chopped.  🤨

[dragontears]

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@coldfusion wrote:

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@wasCB14 wrote:

One situation where it can make sense is if you already have a lot of credit with a lender (relative to your income, that is) and want to get a new card from them, or a big CLI on another card. Requesting a CLD before applying can sometimes make it easier to get an approval.

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Ta-Da. 

Classic example used to be with Chase before they implemented their 5/24 policy across all product.  Emperical guidance was to have no more than (yearly gross income x 50% - $10K) in total aggregate limit across all Chase cards before applying for a new one so request a CLD as necessary. 

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Another example I have seen is Synch tends to limit exposure to 100k combined limits and some people have closed/taken a CL decrease because they wanted a new card that Synch backed

[Anonymous]

And another example, which doesn't apply to anyone here I'm sure, is to avoid "eyes on the account".   Let's say you have done things such as fairly heavy MS  on a card from bank X.  The problematic behaviour doesn't  really show up in scores (the way bonus chasing might) etc, but might be obvious if there is a manual review.   Now you want a card from the same issuer.   The goal is to get automated approval and in many cases reducing your exposure with the issuer so it is clearly in an ok-for-new-card range may help maximize the chance of that.  

[Anonymous]

When you can't stop spending😅