Requesting lower credit limits?

[DaveInAZ]

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@iced wrote:

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@MrDisco99 wrote:

I know Amex will approve new cards and just transfer credit from an existing account if they think you have too much.

Chase will let you do that on recon.

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Chase will also do it automatically. I know at least one instance of an instant approval where they just picked the person's highest balance card and carved some out of its CL to give to the new card.

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BoA will also do that automatically, but the picked my lowest balance card! I had Bankamericard $11k CL, Travel Rewards $6500 CL, and Customized Cash Rewards $5k. App'd for the new Unlimited Rewards, approved but they took the $2900 SL from my Customized Rewards, lowering it to $2100.  But that's OK, I was using it for 3% gas and my BBVA card is going to convert to PNC Rewards w/4% gas, so I'll reallocate the CL to Unlimited and close Customized. 

As to the OP question: I've been considering that. I have a Cap One Quicksilver w/$20k CL, from combining 2 QS w/$10k CL (which they no longer allow). I barely use it anymore, 1.5% rewards doesn't cut it any longer; I have two 2% cards and Cash+ & Max Cash for four 5% reward categories. But Cap One just solved the problem, they tossed me a 12 month 0% for 2% fee. My Penfed HELOC is 3.75%, so I'll use it to pay down that and save a bit of interest. 

[FalconSteve]

Requesting lower limits could hurt you and there is really no reason to do it. Even if you do not carry balances month to month, you utilize credit unless you pay BEFORE your statement posts.

[Guyatthebeach]

Disdreamin,

It's not a bad idea to do from time to time.  I actually did it today when I was approved for a new credit card with $17k limit. I asked them to cut to to $3k. I already have more than enough credit. 

When you start having CL's reduced, you need to watch the impact it as on your percentages. If you are 10% balance to credit line ration, decreasing the CL's will increase your percentage of debt. That may have a negative impact on you FICO scores. Also be aware other lenders will trade lines being reduced which could cause some issues.  Another concern to think about is the impact of obtaining new credit. I personally feel that if you decide to lower the credit lines, do one card every six months to minimize your FICO impact. Then I would add a comment to every CR stating Credit limit reduced at borrower's request.

Guyatthebeach

[disdreamin]

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@FalconSteve wrote:

Requesting lower limits could hurt you and there is really no reason to do it. Even if you do not carry balances month to month, you utilize credit unless you pay BEFORE your statement posts.

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I promise I understand the difference between utilizing credit and letting balances post. I get paid biweekly so I tend to zero my cards biweekly as well. It usually works out that a couple/few cards will have posted balances when the statement cuts, but I try to keep those amounts low. Every once in a while I'll have a few thousand on a card when the statement cuts, but that's the exception rather than the rule, and I'm not at all worried about that happening. We all know AZEO will fix that in short order.

[disdreamin]

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@Guyatthebeach wrote:

Disdreamin,

When you start having CL's reduced, you need to watch the impact it as on your percentages. If you are 10% balance to credit line ration, decreasing the CL's will increase your percentage of debt. That may have a negative impact on you FICO scores. Also be aware other lenders will trade lines being reduced which could cause some issues.  Another concern to think about is the impact of obtaining new credit. I personally feel that if you decide to lower the credit lines, do one card every six months to minimize your FICO impact. Then I would add a comment to every CR stating Credit limit reduced at borrower's request.

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I'm not overly concerned about occasionally having >10% post to a card, that's something that has happened in the past and will sometimes happen no matter what my CL is on a particular card. Anything like that is a snapshot in time and can be corrected the following month by doing AZEO.

As far as new credit, that's the reason my scores are currently as low as they are. I have a new credit card and a new auto loan, so those pulls and paying off all installment loans dinged me considerably. Once the new auto loan posts things should improve a bit, I think, and the inquiries aging off should eventually put me back where I was. Current FICO 8's are:

EQ: 820   TU: 824   EX: 818

[Edited to add: those scores were straight 850's prior to shaking things up with a new card, paying off all installment loans, and then app-ing for a new auto loan recently]

I've already lowered the limits and I did the monitoring so that I can see if/how that impacts things. They've already been updated. For what it's worth, I've been with all of the banks for 10+ years so they all have lengthy payment histories and I don't think lowering limits is going to alarm them, but I could be proven wrong. I'll update if I see movement in my scores.