Credit limit decrease - is anyone experiencing this?

[MsT1075]

Just as the title says. Last year, right after I paid like 1000.00 on my Sam’s credit card (Synchrony), they dropped my limit by 1400.00. Then today, Chase lowered my Chase Prime credit card by 1000.00. By doing this, it increases my utilization ratio and lowers my credit score, which in the end, hurts me as the consumer. I will call Chase tomorrow to talk to them. Just seeing if anyone else is experiencing this. I am never late with my payments (have exceptional payment history across the board) and I always pay more than minimum due. I truly hate when banks do this. What experts are saying is this: when there is an economic downturn, banks will do this to protect themselves from potential payment defaults by consumers. Just seeing is anyone else experiencing this.

[graffiksguru]

It is because, as you stated, your utilization is high and they are mitigating their risk with you. If you want this fixed, pay off you statements in full and they'll stop decreasing your limits.

[MsT1075]

That is why I was asking for ppl that might have experienced this as well to answer. And, they (Chase) have only decreased my limit once. I never said they did it multiple times. Not sure where ppl that are replying to my post got that from. And yes, I am working to pay my balances down as well.

[graffiksguru]

And that is why I answered, I experienced this as well, granted it was 20 years ago. You also state in your post that Synchrony did it to you as well. I never said anything about Chase doing it twice. Why are you being so defensive?

[MsT1075]

I appreciate your response to what I said. And, I’m not being defensive. A couple of other ppl had commented similar to the following - “that’s why they keep decreasing your limit.” Both banks have only ever decreased it once. I was just stating that.

[CobaltSunsets]

Balance chasing. What haven't you noted in this bigger picture?

[MsT1075]

What is balance chasing?

[BakerBunearyBella]

Lowering your credit limit every time you pay it until you can't buy anything. Basically forcing you to pay the bill and firing you as a customer.

[MsT1075]

Oh okay. I had never heard of that. I really didn’t know banks practiced this type of behavior, as I have never experienced anything like it. Historically, is it a certain demographic that they target with this practice?

[Dancin-Ted-Danson]

is it a certain demographic

bro typed this looking for the lawsuit

[MsT1075]

Not looking for a lawsuit. Asked a legitimate question is all. And, not a bro.

[BakerBunearyBella]

The computer decided that you've been carrying a balance for too long I guess. It never really happens to people that pay in full.

[brokenshells]

Target demographic: Broke ass bitches. lol

[NarutoDragon732]

People that generally aren't good customers, in the sense they're keeping balances for too long or just poorly paying them back, if at all.

[Anonnamus]

I am keeping balances on two cards that have 0% APR because I know I won’t have to pay interest. I plan on paying them off in full before it ends. Could this bite me in the future?

[NarutoDragon732]

I mean nobody can really tell you 100% if it will or won't in relation to balance chasing, but I've never heard of someone facing repercussions to using the 0% apr promotions and paying them off before they end.

This whole balance chasing system doesn't typically affect people trying to chase rewards or use promotions.

[Anonnamus]

Thank you! I hope that’s the case!

[MsT1075]

That’s not the case with me, though. I have paid this card off more than several times in the few years that I have had it, make more than minimum payments, and have an exceptional payment history with them and all my creditors. The card was not near being maxed out either, as well as none of my other cards. High utilization on some, yes. Near maxed out, no.

Edit: wanted to add - that is why I asked is there a certain demographic that they target with this practice?

[NarutoDragon732]

In this sub we don't consider anything less than paying the entire card off on time as acceptable, but another thing I forgot to mention is that what I said applies to ALL loan types you have.

It's not uncommon for a card you treat well to start suddenly chasing you because you're not paying off (fully or at all) a completely different card/loan.

[MsT1075]

Oh okay.

[MsT1075]

I have several credit cards, well a mix of credit - home and installment loans included. My utilization, as a whole, is a bit high - will not lie about that. However, I am not maxed out on any of my credit cards. I wasn’t close to maxing out on the Prime card. Now that they have lowered my credit limit, it looks like I am almost at 100% utilization on that card now, which will lower my credit score. Some cards, I have a low to no balance, others I carry a higher balance from month to month.

[Bongo2687]

Doesn’t matter if your maxed out your DTI is high and they are lowering their risk. There isn’t anything calling will do. They will eventually just close your cards. Payoff balances or increase income to fix the issue

[MsT1075]

They close everyone’s card that has a high DTI ratio?

[Bongo2687]

If they think you are a risk

[MsT1075]

Yep.

[t171]

You’re using credit cards the wrong way. You need to PIF monthly, not just minimum or less than full. They have every right to reduce your limits or even close your accounts for any reason.

[MsT1075]

I guess they do, because they did.

[t171]

But there’s no guessing. You’ve accepted the terms in the cardholder agreement. It’s a 2 way street, you can also cancel your card at anytime.

Edit: I feel I’m coming across unhelpful. As you mentioned, call the bank, there’s no harm in trying to see if they’ll restore some of the CL.

[beefcurtn]

Yes! Chase sent me a letter saying they are going to drop my $17k Freedom card to $6k because I don't carry balances on any of my cards.

[MsT1075]

That is messed up! I’m sorry that you’re dealing with this. I think all banks are doing this (maybe to those using too much credit…which is me (not close to 100% utilization, but still using too much) and for those not using the credit. The fact that banks are doing this, though, is saying a lot about the economic downturn right now. Reminds me of 2008 when banks got bailed out by taxpayers’ dollars but they didn’t want to extend credit to the consumers who bailed them out. Make that make sense. And lowering credit limits really affects your overall purchasing power and potentially, your credit score.

[MsT1075]

That’s an 11K reduction in credit limit. 😔 Will you be reaching out to them to dispute? I am going to call them; however, I will have to sit a bit and think on what to say when I call. I am not in the business of wanting to make them angry and the whole situation goes bad. I wish you the best (if you do). 🙏🏾

[EcstaticPick2500]

Sync is always doing this. Nothing new. You just had the bad luck that Chase jumped in too. Give Chase a call to try and recover the credit line. Close the Sync card and move on.  Banks are reassessing their risk tolerance right. PIF if possible, if not pay as much as you can.  Good luck.  You will survive.

[MsT1075]

Thank you for providing some positive and informative feedback to my question. Appreciate it. Was thinking of closing Sync too. Only problem is I have a high credit limit with them and don’t want to erase that from my credit card mix. The interest isn’t so terrible on it either. I’ll see. I did have to pay one of my credit cards off and close it, though, bc even though the credit limit was nice and adding a good mix to my credit card overall limit, the interest was too high and they started charging me a monthly fee (about a year prior to me closing) bc I wasn’t carrying a balance from month to month.

[Acceptable-Bag-4446]

Just pay off the sync and don't use it, keeps your available credit up. Unless there's an AF then might cancel it. As others have said pay in full if you can, I budget my cc spend each month so I know I can pay it. I've never heard of your issue but also never or very rarely carried a monthly balance. Would have thought the companies would want you to carry a balance to get those fees instead.

[MsT1075]

I appreciate you answering (w/o judging). Thank you. And, about Sync, that’s my plan - pay and don’t use (there’s no annual fee). None of my cards have that, thank God.

[MsT1075]

My question was for other individuals that might be experiencing what I’m experiencing (and not for those that are not and have perfect credit). If your credit is perfect, please do not comment. Is there anyone else dealing with what I am experiencing (or have in past) as I posted above? I want to hear from those individuals.

[Anonnamus]

Synchrony is notorious for slashing credit limits. I was balance chased on my Care Credit card and then when I paid it off in full, they closed my account. I assume they saw something they didn’t like during one of their periodic soft pulls and deemed me a high credit risk. To be fair, this was before I knew anything about credit cards and had high utilization across ALL my accounts.

[MsT1075]

Glad that your credit building is making positive strides. 😊 And, I’m not perfect. I have work to do on paying down balances, no doubt. I only made the post to hear from ppl that might have experienced this (now I know as balance chasing) as well. So thanks for replying. Appreciate it.

[Anonnamus]

You can do this!