When a credit card company lowers your credit limit on a zero balance!!!
By coffeebreak
@coffeebreak (17797)
United States
August 7, 2009 11:45am CST
My credit card - which I hardly use and has had a zero balance on for about 6 months - $550 balance before that and payments all made on time, no NSF...totally a perfect customer to this credit card company - my credit limit was$8,000 of which I never even came near using. Just a little bit here and there and only to keep the card open and show a history of repsonsibility in using the stupid thing. My credit report is perfect. Now they lower my credit limiti to $2000. I complaine but of course it fell on deaf ears. Why would they target their perfect, paying customers for absolutely no reason? The reasons they wrote in the letter didn't even pertain to me and my fico is 720 and a perfect credit report. I have had the card for about 8 years - totaly perfect in every way - yet they tell me cause of the current laws and changing time... that they are lowering my limit.
Anyone know why they do this? I guess if I had a responsible reason, I could accept it, but to trash your best customers..just doesn't make any sense at all. They are just hurting themselves.. cause I will not be using that account anymore. I will leave it open as an open/available credit limit helps keep a FICO higher, but I have now have no loyalties to this CC company. Even if they had just lowered it to $5k, I'd not had much a problem with it, but to lower so much for absolutely no reason and risk loosing a customer... I just dont' get it.
Has anyone had any luck with complaining to the company and haveing their limit raised back up? I am relly only looking to keep the limit up there to keep my FICO up there... I have no intentions of using the card any differently than I have in the past 8 years. Just dont get why they trash their good customers. This whole thing was their fault anyway - they made the bad loans... now they trash their good customers... no wonder banks and CC cards are going under.
2 people like this
9 responses
@my52cents (569)
• United States
7 Aug 09
I've read or heard that lots of banks are lowering credit limits. That's just what they do. I suppose it affects their own business line of credit as an institution, not sure.
Don't worry about it. I sincerely doubt it will affect your credit rating.
1 person likes this
@coffeebreak (17797)
• United States
7 Aug 09
Yeah, I know they do it, but I'd assume they'd look at accounts and see if there is a zero balance, the account has been good standing forever... that must be a good client, let's try to keep them and dump someone that isn't paying their account. They have lost a client here.
And available credit limits do effect your FICO... I learned that from Suze Orman. It has always been said.. cut up your credit cards, and close the account. Now she is saying, cut up the credit card, but DO NOT close the account. Leave it avaiable (just dont use it) because FICO is a debt vs. available credit ratio (kind of like debt vs. income)
Your total available credit verses the amount of credit you owe - IF the former is higher, so will be your FICO. If the later is higher, your FICO will be lower. Credit limits show the total available credit you have to spend...credit balances shows what you have spent. So to have it available but not spending it or using it "life off of" shows a good credit risk.. which means a higher FICO.
Just makes me so mad that I do the right thing and get trashed. Why would they even bother looking at zero balance accounts? Obviously the person is responsible...leave the balance there and hope they use it cause they will pay it back. Look at the ones with high balances and see if they are paying or not and make changes there. Not with your good customers.
@savak03 (6684)
• United States
7 Aug 09
That doesn't really make good sense. I've had credit card companies raise my credit limit because I kept the card paid off. They were trying to tempt me to get in debt so they could earn interest from me. Because I paid the card in full each month they were not collecting any interest.
@coffeebreak (17797)
• United States
7 Aug 09
I know! I NEVER asked for a raise in my limit. Started at about $1,000. They chose to raise it. I chose to use it responsibile and not max it out. No, they didn't get as much interest out of me, but in the end, they did get some and they have a customer that will continue to pay the interest.. and not file BK and make them loose it all...principal and interest!!!
They have lost a good customer... they will not be receiving any interest from me now.. but I can get another one in a new york instant and let them earn the interest. What part of stupid do they not understand?
@coffeebreak (17797)
• United States
7 Aug 09
Oh they have a live... we are paying for that wild cushy life of theirs! And their huge cushy bonus they get every year, even get bail out money and they stll get their cushy bonus's and we are paying for it... so yeah.. they do have a life... which is the biggest cause of this problem.
@silverglint (2000)
• Philippines
8 Aug 09
If I was in your place, I won't really mind if they lower my credit limit at all since I don't really get to use the card for that much amount. I don't really understand what you meant about FICO and all that. We don't care much about that is my country or maybe I am just not that aware of things like that. I used to have several credit cards and now I am currently working on having almost all of them cut. I would not keep a credit card with a zero balance. I would immediately have the service cut as soon as the last payment has been credited. I read that it will affect my credit standing but like I said, I don't think we apply that here very much so I don't care. hehehe
@coffeebreak (17797)
• United States
8 Aug 09
Regardless of why I feel want the balance back up even tho I don't use it... what oes this say for being good, honest, paying on time, doing the right thing etc? I mean, I paid on time, never a nsf, played by their rules the whole 9 yards, yet first chance they get, they trash me. Makes one wonder why bother doing the right thing? Why bother being honest? DOesn't matter.. they will trash you whenever they want to and damage your credit... all cause you were responsible and honest.
@dorisday1971 (5657)
• Philippines
8 Aug 09
I also don't see the point why they have lowered your credit limit. .. Maybe the reason for lowering the credit limit is for non-usage of your credit card. . had you known about it, I'm sure you have opted using it than not using it. .
@coffeebreak (17797)
• United States
8 Aug 09
I used it from time to time for that exact reason. To keep the account open and show payment history and keep a good credit rating with them. I never went above about $3k with the limit at $8k. And once a balance was there.. the card went into my safe and not used until I paid that off. Guess they are just a bunch of idiots.
@sunny68 (1327)
• India
8 Aug 09
i think your credit limit is linked to your spending. the spending on card is reviewed periodically and credit limit adjusted accordingly. as you said your spending was nowhere near your credit limit, so the company might have decided that you do not need such a credit limit. if your payment records are good, the more your you spend, the higher will be your credit limit over a period of time.
@dorannmwin (36392)
• United States
8 Aug 09
We have an account that has just had the credit limit lowered as well. Actually, we've had two in the past year to which this has happened. Now, I'm not going to say that we keep a zero balance because we don't. We'd like to and it was a lot closer to that before we bought our fixer-upper. One had a credit limit of 3200 right off the bat and almost as soon as the account was opened they lowered the credit limit to 2000. The other is the card that we've had the longest, always paid more than the minimum monthly payment, never had a late payment, etc. That one had a credit limit of 8500. Now, the credit limit is down to 7000, with no letter of explanation or anything.
This made me so mad that I took all of our credit cards out of my purse except for the store cards which have benefits attached to their use (ie 10% off everytime I shop at the store, 6 months same as cash, etc.) They are now on my desk where I cannot use them.
@coffeebreak (17797)
• United States
8 Aug 09
That's what I will be doing. I just don't get their point... so many card holders are not taking their crap.. you'd think they'd pay attention and see what they are doing and how many customers they are loosing! I just don't get why they punish the perfect card holders...since they say they have so many delinquent ones and BK's. They loose those and then turn around and choose to alienate the good ones they have left! Go figure!
@scarlet_woman (23463)
• United States
8 Aug 09
almost sounds like they're punishing you for not using it.
i had a friend who had a non-usage fee tacked onto theirs.
@coffeebreak (17797)
• United States
8 Aug 09
They just lost me.. I'll leave it open for the available credit limit to assist in my FICO but won't use the card!
@drannhh (15219)
• United States
7 Aug 09
That is cold! The other one that irks me is when I carefully cultivate 4 or 5 different banks so that I can diversify, and then one of them buys all the rest up like a big fish swallowing minnows. Then I cannot play one off the others any more. That too is cold!
@coffeebreak (17797)
• United States
8 Aug 09
I've done that occassionally with the low interest rates they offered. Use the one with the lowest interest rate...
@tdemex (3540)
• United States
7 Aug 09
It's a payback to congress for making them be more responsible! Plus they've taken such a beating by people not paying back at all they are trying to keep this from happening again, they had no way to predict the crisis that is hitting them big time right now! It's their way of over reacting! Don't take it personnel their dong it to everyone! Sorry the new world isn't going to be the same after we recover from this meltdown! 
tdemex
tdemex@coffeebreak (17797)
• United States
7 Aug 09
Oh it is their problem... they gave credit to easily to those that didn't qualify properly and made hugely BAD mortgage loans. I used to process those suckers and haated every minute of it... I knew the people couldn't afford the loan when it adjusted.. but they borrower wasn't approved based on what the rate would be when it adjusted 2-3 times.. they were only qualified/approved based on the loan rate at time of signing. Stated Income programs, No Income, No Asset (NINA) programs and the like... they made a program to fit every bodys work situation.. not everybodys financial situation. I was told to follow the guidelines set by the lender.. anything else was not included. IF they qwualified on 2.5% interest, it was not my place to question the lender as to the issue that they wouldn't be able to afford the payment when the interest raised to 5% and higher in 3 yers down the road.
I quit as I couldn't stomach it any longer. Throw in outrageous "to good to be true" property values...even a stupid idiot could have seen this foreclosue crush happen.
So, yes it is their fault the economy crashed as it did. Bad loans offered and credit cards to just anyone... talk about a ticking time bomb. And I am not financailly intelligent either... just plain simple common sense.
But the question still remains... if they want to be paid back for their loans... why trash the ones that are paying back their loans? I do/have done exactly what they asked... played by their rules.... yet they attack me. This credit card company just lost a perfect customer. DOn't see where that will help them pay back congress or help them in their own financial standing. I'll take my business elsewhere.
1 person likes this
