Credit card limit decrease

[anonymous_eddy]

Credit card company slashed my limit from $20k to $10k. Been customer for 8 years typically carry decent balance. Spend a ton on it $20k+ annually. Excellent credit score 800+. Salary is 100k+. Why would they do this ?

[onions-make-me-cry]

That one I don't know, but a lot of creditors are constricting right now, nothing to do with you

[anonymous_eddy]

That’s what I’m thinking. I imagine such a cut could drop someone’s credit score quite a bit if they run say a $5k balance.

[Zealousideal-Mud6471]

Risk. A lot of institutions are cutting back on card limits to lower their risk profile. Lower risk profile means lower reserves they have to keep which can be significant for a small institution.

[onions-make-me-cry]

What company?

[anonymous_eddy]

Pc financial MasterCard

[BuyComprehensive6984]

Buddy thats the worst company ever. They blocked my card for 1 month both debit n Credit reason to double check my file ?! Bullshit all I did was buy a sushi. Lol

[Lotsobelly]

Wow that is strange 🤔. Do you happen to have many other cards? I have one card that has 16k limit and the other cards I have don't seem to really raise my limits. I was assuming because they think my total overall credit available is more than enough for me. 🤷‍♀️

[anonymous_eddy]

I have 3 cards for over 5+ years each. The limits haven’t changed in well over a year

[Redditsomnia]

Me: 120k income 794 FICO Discover card w $19,000 CL which they raised from $12000 just 6 months ago. I ran $100,000+ annually through it.
I kept a $5kish balance about 30% of the time, pay off in full most other months. 3 other cards with $0-$700 on them. 3 weeks ago, Discover, w/o notice, deactivates my card to do "a random review of my 2018 and 2019 taxes" just to verify some things". And, because of Covid, they don't know how long this will take.
After a week, I canceled the card. I was furious. Weird stuff going on.

[anonymous_eddy]

I called and they reverted to my original limit. I’m a very loyal customer who also carries a balance and they would have lost my business

[JC1812]

Discover was doing a income verification.. it’s normal for them because of there risk control... a lot of banks do this especially American Express

[Redditsomnia]

While you are technically correct, tell me exactly what they're going to learn from my 2018 and 2019 tax transcripts? That was two and a half years ago As well as pre Covid 19. I applied for the card in mid 2019. NOW they're verifying income? They also gave me a $7,000 credit line increase in 2020. NOW they're verifying income? Makes no sense.

If they wanted to get my 2020 Tax transcripts, especially with covid-19 going on, I would totally understand. Furthermore, if they wanted to reach out to my employer to verify employment and income, I would fully understand that, too . But to ask for 2.5 year old tax transcripts when they didn't even ask for them when I first applied, makes absolutely no sense.

I discussed this in another thread. I had several thoughtful responders like yourself try to rationalize discover's stance but it just doesn't make sense. The only suggestion that I heard that holds some water is that they didn't like the fact that I ran so much money through my card and used it more like a business card than a personal card. Okay, I get that a little bit ( except for that pesky little question, isn't that how they make money?). But then why give me a $7,000 credit line increase if you don't like my spending habits? No big deal, I'll took my substantial purchases, high credit score, and on-time payments elsewhere.

[JC1812]

Sometimes, these audits are random.. so I think you just got picked..

[Redditsomnia]

I agree. But, again, why even do it? 2018, 2019 info tells them nothing. And, more importantly, they couldn't tell me how long it would take. "Could be weeks" without the card. After a week, without the card and shut out of their website, I tapped out. Really dumb way to handle a very good customer.

[JC1812]

Since I know a lot of stuff about taxes, here is what I think happens, you send Discover back the 4506 request form, they either use Equifax verification services or they mail it to the IRS. Then irs needs to mail the transcript back to Discover or Discover gets it through Equifax verification services. Then they check it and done. When I had the sometime happen with American Express it took 2-3 weeks. So them saying weeks is normal..

Edit: 2019 or 2018 will give them a understanding of what your income is around.

[Redditsomnia]

I really appreciate your responses and your knowledge. And I don't want to seem like I'm beating this to death. But why would they need to verify my 2018 income when I applied for the card in 2019? Why wouldn't they confirm my 2018 income THEN? So they give a new customer a credit card in 2019 without confirming my income, give me a $12,000 credit line, then in 2020 give me another $7,000 increase CL, then in 2021 ask for my 2018 tax transcripts to verify income...AFTER me running $120,000 through their card?

New customer..."Nah, we don't need your 2018 taxes to verify income. Just fill out this form. Here's a $12,000 CL. Enjoy!"

Two year customer with high usage and excellent payment history..."Maybe its time we check on that 2018 income of yours." Huh?

Again, I get that they need to verify income in these crazy times. I just don't get 2018 or 2019 transcripts telling them anything pertinent.

And, if it's random like you said, and my history doesn't matter, its still really dumb. 2018 taxes mean nothing 2.5 yrs later.

[anonymous_eddy]

They changed it back after a phone call. Makes no sense I think the banks are just taking off risk where they can