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Reduced Credit Limits? Share Your Experience

Written by Nickel - 256 Comments

About a month ago, I published an article over at Credit Addict about protecting yourself against reduced credit limits. Since that time, readers have left a smattering of comments lamenting that their credit limit has been reduced. We’ve been totally unaffected by this, so I’m curious as to how widespread this problem is. Interestingly, all of the commenters reporting a reduced credit limit have been dealing with American Express.

Have your credit limits been reduced?

Published on October 31st, 2008
Modified on January 16th, 2010 - 256 Comments
Filed under: Credit Cards, Debt Reduction

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256 Responses to “Reduced Credit Limits? Share Your Experience”

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  1. 1
    Ben Says:

    I have no clue if any of my limits have dropped. I never get any where near the limit to begin with so it wouldn’t matter anyway.

    Though with a FICO score exceeding 800 I doubt I’ll see my credit denied or lowered.

  2. 2
    Mr. ToughMoneyLove Says:

    My credit limit on my one credit card has not changed which probably means that because I don’t use consumer credit, they don’t bother with me. “Reducing credit limits” is another way of saying “Adding reason and logic to the credit marketplace.”

  3. 3
    Jennifer Says:

    None of my limits have dropped, but I’m still early enough in this process that I’m still sitting fairly close to the limits on my cards. One thing I will note however, is that Discover is usually pretty quick to RAISE my limit when I sit as close to the limit as I am now, but they’re not budging it right now. That’s fine because I don’t want more credit, but I did find it interesting to note the difference.

  4. 4
    Joe Says:

    My wife’s American Express CL was reduced from 10K to 500. Prior to the CL reduction she hadn’t used the card for about 6 months. She got an offer from them to use the card at some specific stores and she would recieve a $30 credit. After the first use she got a letter reducing the CL.

  5. 5
    ACB Says:

    Oddly, Chase raised my limit from $4,500 to $5,300. BofA hasn’t changed my limit with them at all.

  6. 6
    Adam Says:

    Oddly enough, AMEX doubled my credit limit from $5,500 to $11,000 in September. I do not have anything on the card but I do have some debt on other ones. I have not had of the other ones get decreased either. I wonder if the individuals that had their limits decreased have bad credit.

  7. 7
    Ken Says:

    Still have my $30k Blue and $20k Costco AMEX limits.

    Haven’t touched the blue in a year. Most i ever used on a card was about $10k when i had 0%.

  8. 8
    cemccon Says:

    My Wife’s Sears MC (Citibank) was reduced from $11,000 to $7,000, with the explanation that they had reviewed her spending pattern, and reduced her limit accordingly. There was actually mention of Sears / Citibank doing this on the national news this morning. All we have on the Sears card at the moment is an HDTV we bought last November that has 18 months 0% interest … so, of course, we’re not making other charges with the card until that’s paid off.

  9. 9
    Brandon Says:

    Actually, oddly enough, some of mine have increased.

  10. 10
    Luna Says:

    None of mine have decreased, but I just got a notice from Citibank that my visa card with them actually increased! I was like “What the heck???” I definitely wasn’t expecting that.

  11. 11
    Yvon Thea Says:

    In the Philippines, credit card credit limits do not decrease. Card companies usually increase credit limits on a yearly basis.

  12. 12
    frugalchick Says:

    Nope, no Credit Limit decrease here either. But, I got a Terms of Agreement change from Chase (in which I don’t have a balance) increasing the APR to 20% something. Yikes! I will be cutting that card up for sure.

  13. 13
    Kev Says:

    Decrease? What Credit Crisis? Discover has INCREASED my limit TWICE this year!

    I don’t really get it, but I think they are trying to get me to use that card again. They were even nice enough to lower my now Variable APR from 28.9% to 25.9% since I’ve been such an awesome customer!!!

    I hate them… And have already told them what they can do with their limit increase. I would starve before I would ever use that card again.

  14. 14
    Kristina Says:

    Nope, no decreases. They have stopped increasing my limits, though. Last year, Citibank increased my limit twice. At the beginning of the year, my credit limit was $9000. By the end of the year it was $17,900.

  15. 15
    Kim Says:

    I haven’t had any changes of credit limits but Citibank sent me a letter saying they were canceling my credit card with them because I hadn’t used it in a year or two. I charged something on it (small item) so I don’t lose my credit history with them.

  16. 16
    cs Says:

    My Sears MC (Citibank) was reduced from $10,000 to $6,000, with the explanation that they reviewed my spending pattern (I only used this card once ot twice a year), and lowered my limit accordingly.

    I closed out this account – one less card to manage.

  17. 17
    JC Says:

    Had an AMEX line dropped from 25K to $500 a couple months ago. Hadn’t used the card for any purchases, ever. But did use it to balance transfer 21K at 0%. Paid it off before paying any interest. Just applied for an auto loan through Capital One auto and was approved literally in 30 seconds for 30k at their lowest rate. Interesting times…

  18. 18
    Michelle Says:

    I’m with capital one, and so far, so good!

  19. 19
    EN Says:

    I have an Amex SimplyCash card and so far no reduced limit….yet

    Actually, quite ironically, Citi just recently gave me a credit limit increase!

  20. 20
    TonyN Says:

    My wife and I have various credit cards, all with limits ranging from 5K to 35K on each card. Most of our cards have RAISED our credit limit by carying amounts- 3K to 5K. American Express LOWERED our credit limits twice in the last 18 months. It went from 20K to 3K to $1,500. They claimed it was because of delinquent credit on our other cards. My wife and I have credit scores near 800 and have NO blemishes, late payments, etc. Delinquent my a*$. I hope they go bankrupt. They will NEVER see another dime of our money.

  21. 21
    DW Says:

    No reductions yet .. not even on my Amex, which I just got a couple of months ago. I am still getting at least one credit-card offer in the mail every day. I thought credit was hard to come by?

  22. 22
    Susan Says:

    I’m like Tony, I’ve had multiple AMEX cards over the past couple of decades, never been late, never missed a payment. I have several other credit cards with high available credit and no missed payments… and yet, inexplicably, AMEX has lowered the rate on my Blue card from over $10K to just about $2,300 in the past year — all without notice. I absolutely HATE AMEX and hope they go under. They are a disreputable, dishonest, sleazy company.

  23. 23
    Miss M Says:

    Quite the opposite, some of my limits have been raised recently. I don’t have AmEx though. I think people with top tier credit will become more valuable to creditors, hence they’ll do more to keep them happy like higher limits.

  24. 24
    Shadox Says:

    AmEx increased our credit limit unsolicited.

    I actually don’t like when they do that.

  25. 25
    Ed Says:

    Amex lowered our limit by about $3k, that is the only card we use regularly, not sure why it was lowered. Never late, no other problems on other cards or any loans for that matter.

  26. 26
    Brack Says:

    Although it hasn’t happened on American Express, two of my other cards have actually raised my limits.

    American Express has stayed the same for about a year now…

  27. 27
    MITBeta @ Don't Feed the Alligators Says:

    No reductions yet, but just signed up for the AmEx Blue Cash card and only got a $5000 limit. Anyone have any thoughts on the best strategy to get them to increase it? Maybe a couple of months of full, on-time payments?

  28. 28
    Funny about Money Says:

    I haven’t seen a reduction yet, but I did get this “IMPORTANT NOTICE OF CHANGE IN TERMS” from Chase’s Visa card:

    “Your default APR will be changed to a variable rate of 29.99%.”

    Nearly as exorbitant are rates for “overdraft advance APR” and “cash advance APR,” both variable rates now pegged at 20.99%.

    Since I don’t carry a balance and, because I’m less than fond of Chase, rarely charge much on this card, I don’t suppose it matters. But it is…well…jaw-dropping.

    IMHO, rates of this magnitude ought to be illegal.

  29. 29
    Tim Says:

    we have two that have no limit, so i guess those don’t count. others, they have increased limits and we continue to get 0% BT offers on all of the cards.

  30. 30
    michele Says:

    I have had limits reduced on three of my cards recently. Amex, US Bank and Bank of America. All lowered my limit to within $100 of my balance. Stated reasons was my credit usage/high balances.

    I have been making large payments to try to pay these cards off and each time I pay them down by $500, they lower the limit by that amount.

  31. 31
    kitty Says:

    No reductions yet on any of the cards yet including AmEx blue (13K credit limit). Higher limit (from 10K to 18K) on one of the cards.

    Got a couple of pre-approved 0% offers for 15K; I don’t need it so I just tore it up and threw it away.

    @Funny about money — I also have Chase (Amazon) and I got the same type of a letter; since I also pay my balances in full, I couldn’t care less. I’ll continue using it for amazon purchases since I like their rewards. This one is set up for automatic payment of the full balance, so there is no way it can ever be late.

    @Shadox – if you feel strongly against their raising your limit, you can call them and tell them you don’t want the increase. They will lower it back. You can also tell them you don’t want further increases, and they’ll mark it on your account.

  32. 32
    Nick Says:

    Mine have actually been increased. I would say that’s because the companies are issuing less to new customers, and are maybe trying to make up for that by allowing their current customers with good credit to spend more.

  33. 33
    Jo Says:

    Ironicallly, I got a notice today that my credit limit on Citi has been raised about 10%. However, they have consistently raised my limit any time I get serious about paying down the balance. So, despite the current credit crisis, Citi is trying their best to entice me to spend more.I’m paying (literally) for past mistakes, but I have no intention of repeating them.
    I don’t have any other cards, so as far as my experience goes, I don’t see reduced limits.

  34. 34
    Brian Says:

    My cash doesn’t have credit limits, so I’m not concerned.

  35. 35
    Noreen Says:

    Out of all my credit cards, the one card I haven’t used was reduced. It was my IKEA card and it went from $500 to $221 (which is an odd number, to say the least).

    They reviewed my spending patterns too and adjusted the card accordingly.

  36. 36
    rhona Says:

    citi keeps increasing my limit and lowering apr but target just raised all apr on there cards by 3% they suck

  37. 37
    PowerhouseD Says:

    My Costco AMEX credit card had its credit limit lowered from $30k to $2600 in one fell swoop last week There has been no change in my credit score (720s) since I applied for the card two years ago. AMEX is turning into a bank and trying to limit its risk so it can qualify for some gov’t bailout money. I hope Costco picks up a different creditor.

  38. 38
    rj Says:

    Amex cut my credit limit from 8000 to 5500 without any notice, I was confused if there was a fraud purchase on my card. Amex stinks, I never made a late payment and gave them a lot of business. no more but.

  39. 39
    K&S Says:

    AMEX SUCKS!!! My husband and I have credit scores close to 800 (we just checked w/credit union) and today I get an email stating that our credit limits have been lowered on both our Blue and Costco cards. We have been card members since 1999. Our Costco card went from $29500 to $10600 and our Blue went from $22500 to $10600 but our Discover card was just increased. We do not carry large balances on these cards, but have been using them (for rebates & points) to decorate our new house. AMEX is totally screwing with people credits and I am very disappointed in their business practices. I too hope they go under or somehow is able to be reported on their unfair business practices. We are planning to pay the balances off and not use them again. I wish I could sue!!

  40. 40
    Ken Says:

    Still at 30k Blue and 20k costco with amex. 800+ score.

    Haven’t touched the blue in a year.

    Max on costco is about 2k in a month.

  41. 41
    jackson bridges Says:

    Just found out that AMEX lowered our limit by another $4000 on Wednesday, November 26! Found out when my wife went to purchase gas. They had just lowered it by $4000 10 weeks ago. As soon as I sent them $3000 for this month’s bill, they lowered it another $4000 putting me over my limit immediately.
    As a result, I will not send them any extra and will pull $ out of a mutual fund and send it to another creditor freeing up more credit with them and cease to use the AMEX.
    My wife and I have spent over $680000 on our AMEX cards in the last 19 years, but now we are “high risk!”
    We will also boycott businesses that accept AMEX and buy from those who do not accept AMEX. We will let the merchants know why. We are in our sixties and have 82 credit accounts “paid as agreed” without a single late payment!
    I suggest that anyone else who has just gone thru this send a letter to the CEO, Kenneth I. Chenault @ Amex, World Financial Center, 200 Vessey Street, New York, NY 10285, and express your complete dissatisfaction.
    AMEX cannot survive if people do not use their card.

  42. 42
    MS Says:

    I always pay on time and I pay over the minimum. My score is 774.
    Last week American Express cut my credit in half, down to what I owe. This act on, the part of American Express, will damage my credit by showing that my credit is extended. Won’t this create a domino effect, that will have a serious effect on my credit? I say yes it will.
    I have contacted my representatives on this. This is a serious problem. I urge everyone to write and call them.

  43. 43
    jtd Says:

    just had a nice arguement with 3 of boa’s card services managers. they cut my limit from 14400 to 4400. my balance is 4200. they left me 200. i did not even get any notification. i happened to see it through my on line banking. i have Never been late with a payment on any of my accounts.When i told them they were going to lose a good paying customer they really didn’t seem to care. screw bank of america i will just transfer my small balance to another card with a 0% transfer for 1 year

  44. 44
    Melissa Says:

    Yep, same thing happened to me. Six weeks ago Amex cut my limit by half. Just yesterday I checked my credit scores, and they all three dropped by about 75 points (average). I am LIVID. I have always made my payments on time, but the credit score analysis said that I have too high of a debt ratio. I didn’t prior to them lowering my balance. Sure when it goes from $30K down to $15K, my debt ratio is going to be higher.

    I am paying the thing off and never paying them another dime. The whole “banking/credit card/credit score” practice is the most idiotic, unethical thing I have ever witnessed. Amazing that I’ve turned into high-risk when I have not changed one thing in the way I spend, work, or pay bills.

  45. 45
    nickel Says:

    Melissa: Are you sure about cause and effect here? 75 points is a really big drop in response to a credit limit reduction. Is it possible that your score dropped (at least somewhat) which prompted Amex to reduce your credit limits, perhaps further reducing you credit score.

  46. 46
    TonyN Says:

    Just an update to my previous post. Amex attempted to raise our interest rate on us after chopping our credit limits to nothing. That was the last straw. I cancelled them. I hope they go bankrupt- just like their business sense and ethics.

  47. 47
    MS Says:

    I contacted my congressman, Trent Franks in Arizona, and they looked into the problem they said. They called me and told me they can’t help. I told them that this was happening all over the country. It’s a nation wide, “NATIONAL”, problem. They said, only, that the congressman is aware of the problem. If they won’t act on this what the hell is going to happen. This credit crisis will just keep getting worse.
    I have also written my Senator, Kyle. I didn’t bother writing that worthless fool McCain.
    Just this morning the news said that home interest rates could drop from 5.5% now to 4.5%. What the heck good will this do us when our credit rating is dropping. Home prices are dropping also. How can a person get re-financed under these circumstances. What the heck is going on. What a joke.

  48. 48
    Mike Says:

    Talk about “Discrimination” by American Express. I feel i’m being slapped in the face and their is nothing i can do about it. I just read a paper on American Express and it states that one of the ways they come to the decision to lower ones credit limit is based on several accounts. They base it upon where you live, where you shop and who holds your mortgage on your home. Even tho i pay my bill every month on time, and have never been late, These fools seem to think its good business practace to slapp me in the face with a letter that they are lowering my credit limit by more than half. I will never use this card again, and i will be sending several letters. I urge you to shop around and find another company to do business with. AMEX Sucks!

  49. 49
    Katharine Says:

    I have noticed a few people on here making comments like, “I have a credit score in the 800’s so they keep people like me with good credit happy…” Well, a little newsflash: My credit score is in the 800’s, have NEVER been late on any of my payments, but AMEX just cut my credit limit in half with no prior notice. What ticks me off is the fact that we never used it until 3 weeks ago, when my husband bought me a new ring for our anniversary, and we decided to put it on that card. Today, I checked the account and they lowered the limit to 300 dollars above our balance, so now the card is almost maxed out which is something I never do. I am extremely upset, and will be cancelling the card once it is paid off in a month or so. AMEX is a bunch of crooks.

  50. 50
    Molly Says:

    Is there someone here that would/could supply me with the wording of the letter you received from your credit card company in regards to lowering your credit card limit?

    This is a strange request .. but my alcoholic husband, refuses to stop using MY card. I would like to “tell” him that my limit has been reduced. If that does not work, I will attempt to “conjer” up a letter documenting this.

    This is very manipulative, I know .. but husband will not listen to me and continues using my card. I KNOW that if he thinks that the limit has been lowered, he will finally get it through his head that he cannot continue to use for his “entertainment” pleasure.

    For those of you who believe that this is being dishonest and manipulative on my part .. my husband, I believe, is in a cycling stage of his bipolar depression and it does not matter what I do or say, I have not been able to reason with him. If I have to be somewhat underhanded and extreme, I have resigned myself to this .. at this point and time.

    Thanks in advance for anyone that may have some compassion and might supply a “generic” form of the letter that they received.

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