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Started By
Message
Lowering Credit Card Limit
Posted on 1/5/16 at 12:04 pm
Posted on 1/5/16 at 12:04 pm
Currently have an 800 credit score. Will asking bank to lower credit limit (currently $28,000) have a positive or negative effect?
4
Posted on 1/5/16 at 12:10 pm to WPBTiger
What's the reasoning for it?
Posted on 1/5/16 at 12:11 pm to LigerFan
quote:
What's the reasoning for it?
I want to get another card and figured having a total of $40 - $50K in credit available may hurt. Am I wrong?
Posted on 1/5/16 at 12:44 pm to WPBTiger
quote:
Currently have an 800 credit score. Will asking bank to lower credit limit (currently $28,000) have a positive or negative effect?
Negatively effect. No reason to lower it.
Posted on 1/5/16 at 12:45 pm to WPBTiger
quote:
I want to get another card and figured having a total of $40 - $50K in credit available may hurt. Am I wrong?
Yes. No penalty to having credit available. It can actually help you by lowering your credit utilization. If you have 50k available and only use 3k of it each month then this is a strong indicator that you a good with money management.
Posted on 1/5/16 at 1:34 pm to WPBTiger
It depends who the card is with currently and what card(s) you are looking to get. Chase apparently has a dollar limit they'll assign based on what they've given already and what your income is. Lowering a Chase credit card limit to get a different Chase card for a sign up bonus is an often used practice.
It will obviously (at least temporarily) reduce your available credit but if you pay it off every month anyway it won't have much of an impact on your credit utilization. Unless, of course, you charge and pay off a high number every month as the statement balance is going to report to the bureaus.
It will obviously (at least temporarily) reduce your available credit but if you pay it off every month anyway it won't have much of an impact on your credit utilization. Unless, of course, you charge and pay off a high number every month as the statement balance is going to report to the bureaus.
Posted on 1/5/16 at 1:37 pm to VABuckeye
quote:
It depends who the card is with currently and what card(s) you are looking to get.
Current card is through Chase, new card would be AMEX.
Posted on 1/5/16 at 1:48 pm to WPBTiger
negative as it makes the ratio of debt:limit smaller.
Posted on 1/5/16 at 5:23 pm to lynxcat
You don't have anything to worry about with that score.
Posted on 1/5/16 at 5:34 pm to WPBTiger
quote:
Current card is through Chase, new card would be AMEX.
Then there's probably no reason to lower the limit as I presume you are an extremely responsible user of credit.
Posted on 1/5/16 at 6:03 pm to VABuckeye
quote:
Then there's probably no reason to lower the limit as I presume you are an extremely responsible user of credit.
Pay the card off monthly.
Posted on 1/6/16 at 6:48 am to VABuckeye
quote:
Lowering a Chase credit card limit to get a different Chase card for a sign up bonus is an often used practice.
I did this recently. Had 45k limit on 2 chase cards. Lowered the one I don't use much by 15k. Got the chase freedom with 25k limit, so still increased my credit:debt ratio, which in time will increase my score
I wouldn't worry about it though if you are applying for a different credit lender
This post was edited on 1/6/16 at 6:51 am
Posted on 1/6/16 at 11:11 pm to WPBTiger
quote:
I want to get another card and figured having a total of $40 - $50K in credit available may hurt. Am I wrong?
Mostly, yes you are.
A credit score is intended to be a measure of how you handle open credit lines. If you have an open line and don't use it, then the major risk a creditor might have is that you will have a major life emergency and have to raise money to the gills on very very short notice.
This is a very unlikely scenario. It *could* happen, so there will be a very slight ding, but nothing to worry about.
I personally have over 100K in open credit card lines that I never use. And my FICO is around 800. Having large and unused lines is a good sign that you're trusted to use them well.
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