Do credit cards lower your limits @ RE?

[FIREd_2015]

That sounds weird. I ask for an increased credit limit on my Citi 2X Mastercard every 6 months. So far, it has been granted each time. They turn me down if it's a day shy of 6 months, though!

It sounded weird to me too and I wasn't about to send them a copy of my taxes. Maybe it's an Elan Financial/Fidelity thing. I rarely come close to my current $9.5k limit but wanted to up the limit to something closer to what I have on some other cards (~20k limit) that I don't use anymore just in case I decide to go on a charging spree.

 

[mamadogmamacat]

There must be different perhaps widely different algorithms used by different companies.
I pay off all cards every month and have never charged more than 15% (and that only once, it is usually no more than 2% to 5%) of my very high limit on Capital One. Yet, they have never reduced my limit nor asked about income save for perhaps twice in 25 yrs. An occasional say 5k increase in limit seems to be given automatically every 5 yrs or so. I do use the card ever month. On the other hand two other cards that i also use every month bug me regularly about either income or do i want a limit increase. I never had said yes as one has a 30k limit already.

 

[Amethyst]

Or perhaps even a scammer thing?? Maybe some people actually do send their tax forms - SSN and all!

It sounded weird to me too and I wasn't about to send them a copy of my taxes. Maybe it's an Elan Financial/Fidelity thing.

 

[Winemaker]

We get our limits raised all the time; and in fact DW just got a new card that will pay us a bonus to charge something within the first 90 days. Yea!

 

[Scuba]

I’ve been asked to update income on several cards. Have generally ignored the request. I’ve also been told by US Bank and Chase that our cards would be cancelled due to inactivity. We charged a few low cost items on them and I guess we’re good to keep them. Don’t really care other than our credit score might suffer if these two cards closed our accounts suddenly.

 

[bada bing]

There must be different perhaps widely different algorithms used by different companies.

I think this is the answer. Not only does it appear there are big differences between policies at different issuers, it seems like individual issuers change their policies from time to time on a whim.

I've been a credit card user my whole life and run pretty much my entire budget through cards. I'm a PIF type person and don't pay interest, ever. I have occasions where one card issuer was giving me a huge unrequested limit increase at the same time another issuer was slashing my limit with them. The behavior of credit card issuers follows no rational rules.

I do know that a statistic that card issuers pay attention to, that they have access to from reading your credit report, is largest historical balance on all your accounts. They seem to really go overboard if they see you have had a huge balance reported in the past. About 5 years ago I bought an Audi A8 and put $50K of the purchase price on a card for the points. I paid it off next statement before it accrued any interest. Over the next few months I got some huge, unrequested limit increases on all my cards. Some have since been rolled back. I still have over $200K total limits across 5 cards when my typical monthly spend on all cards combined is ~$4K.

I've come to the opinion that there is no way to predict what a card issuer might do. I keep some diversity in issuers and accounts in case one of my issuers goes nuts for a while, like I've experienced a few times in the past.

 

[Car-Guy]

I really don't want or need higher limits on my CCs so I just ignore such "offers/requests"

 

[rayvt]

Capital One outright cancelled my card many years ago out of the blue because I wasn't using it "enough". Be glad they just lowered your limit. While I don't like to say "never", I will say that I will not ever willingly apply for credit with them/use their services again if I have other options.

Every company will cancel your card if you don't use it for a long enough period of time.
A few years ago I went through all our cards to cancel the ones that we did not use---mostly store cards (Lowes, Sears, etc.) Most of them had already been cancelled by them without me knowing about it.

If you want to keep a card alive, just charge something on it every 6 months or so.

 

[scrabbler1]

Every company will cancel your card if you don't use it for a long enough period of time.
A few years ago I went through all our cards to cancel the ones that we did not use---mostly store cards (Lowes, Sears, etc.) Most of them had already been cancelled by them without me knowing about it.

If you want to keep a card alive, just charge something on it every 6 months or so.

Back in 2009-10, I had two cards closed due to inactivity - I hadn't used them in more than 10 years, in one case I had never used the card in all 20 years I have it.

But I have used my back-up card only once a year for the last 3 years and it is alive and well.

 

[CaptTom]

Every company will cancel your card if you don't use it for a long enough period of time.

I made the mistake of getting a Discover card years ago. They'd send me new cards several times a year, hoping to get me to call in to "activate" (which really meant, listen to a sales pitch for something.)

I never used the card. I never called. I was SO relieved when they finally cancelled it.

 

[albireo13]

No, they would love to get you into as much debt as possible !!!

 

[Dtail]

I have a Chase card from 14 years ago on my credit report. Don't physically have the card (ex had opened the account and also doesn't have the card) and it has a zero credit limit.
For now, not doing any action on it, as it raises my credit score.

 

[scrabbler1]

I made the mistake of getting a Discover card years ago. They'd send me new cards several times a year, hoping to get me to call in to "activate" (which really meant, listen to a sales pitch for something.)

I never used the card. I never called. I was SO relieved when they finally cancelled it.

This was one of the credit cards I got but was canceled by them. I never used mine, either, and I got it in 1990 when I tried to buy something at Sears but could not use my regular CC to buy it. Discover called me a few times trying to get me to use it, and the caller had all those prepared responses to anything I said about why I hadn't used it in a while. But the caller got stumped when I told her I had NEVER used the card the whole time; she ended the call.

 

[jazz4cash]

I have a Chase card from 14 years ago on my credit report. Don't physically have the card (ex had opened the account and also doesn't have the card) and it has a zero credit limit.
For now, not doing any action on it, as it raises my credit score.

I don't understand how a zero credit limit card would raise your score. Perhaps is helps with length of account has been opened but I don't think that is a big factor. I have a few that have not been used in many years. Im surprised the haven't been closed by the CC companies and I have been too lazy to do it myself. It all supports my belief that credit scores are a scam. One of the cards I have recently added a "what if" calculator to their free credit report feature. I've tried it out and it doesn't seem to move the needle much if I add or cancel accounts or payoff the balance.

 

[Dtail]

I don't understand how a zero credit limit card would raise your score. Perhaps is helps with length of account has been opened but I don't think that is a big factor. I have a few that have not been used in many years. Im surprised the haven't been closed by the CC companies and I have been too lazy to do it myself. It all supports my belief that credit scores are a scam. One of the cards I have recently added a "what if" calculator to their free credit report feature. I've tried it out and it doesn't seem to move the needle much if I add or cancel accounts or payoff the balance.

My thinking was the length of the account. I believe after the timeliness of payoff of balances and % of use of available credit, this factor is next in line.

 

[rayvt]

It all supports my belief that credit scores are a scam. One of the cards I have recently added a "what if" calculator to their free credit report feature. I've tried it out and it doesn't seem to move the needle much if I add or cancel accounts or payoff the balance.

You don't understand the purpose of the credit score system.

It is not to tell the banks how good of a score you are. It is to tell the banks if there is a significant risk that you will not make your loan payments.

Just about everyone here is in the category of "yes, no problem here". They don't care about the difference between "Yes", and, "Yes yes yes!!" and "Oh hell yes". We all will make our payments, no worries. And that's all they care about.

 

[rayvt]

BTW, the credit card interest is not the only stream of profits that they make. The other stream of income is the "swipe fee". They get income for processing the money. That's how they can give us 1%-2% cash-back and still make a profit off of us who pay the CC bill off every month and never carry a balance and so never pay any interest.

To the merchant, the swipe fee (processing charge) is just another cost of doing business, and is incorporated as part of their overhead cost. So it is included in the price of what you buy, whether you use the CC or not.

 

[jazz4cash]

You don't understand the purpose of the credit score system.

I hold a different opinion than you do wrt the purpose of the credit score system.

 

[jazz4cash]

My thinking was the length of the account. I believe after the timeliness of payoff of balances and % of use of available credit, this factor is next in line.

The pie chart I looked at shows length of credit history is weighted 15%. The other components you mentioned are 30-35% each. I ran the credit score simulator at Chase.com to simulate closing my oldest account (30 yrs I think). My score changed by 1 point

 

[HI Bill]

We are using another poster's suggestion to have a "carry" card and a "drawer" card that has all the auto-pays. That way if the carry card is compromised in our use out at random stores we don't have the pain of re-doing all the auto-pays.

I have a "carry" card (COSTCO), an Amazon card (which I only use at Amazon), and a UA Explorer Card (which is currently my non-carry card for recurring purchases). Next year, I may flip the use of the COSTCO card and the UA card, as I'll be travelling extensively, and won't have access to COSTCO frequently. But right now, the best benefits (cash back) are with the COSTCO card for COSTCO purchases, and Amazon for Amazon purchases.

 

[audreyh1]

I have a "carry" card (COSTCO), an Amazon card (which I only use at Amazon), and a UA Explorer Card (which is currently my non-carry card for recurring purchases). Next year, I may flip the use of the COSTCO card and the UA card, as I'll be travelling extensively, and won't have access to COSTCO frequently. But right now, the best benefits (cash back) are with the COSTCO card for COSTCO purchases, and Amazon for Amazon purchases.

The Costco card has better travel perks than the UA card. The UA card is great for primary insurance on car rentals. Otherwise the miles earned aren’t as valuable as the Costco 3% cash back Rewards on travel purchases and dining now that the Costco card dropped the foreign exchange fee.

 

[HI Bill]

The Costco card has better travel perks than the UA card. The UA card is great for primary insurance on car rentals. Otherwise the miles earned aren’t as valuable as the Costco 3% cash back Rewards on travel purchases and dining now that the Costco card dropped the foreign exchange fee.

Thanks! I had also forgotten about my Hawaiian Miles Card - it's chip and pin, so I may need to use it some overseas...