Changes by credit card issuers coming - lower credit limits for non use of card...

[jabberwocky]

Remember, assuming your debt is fairly constant when a company lowers your available credit your debt to credit ratio increases which causes a decrease in your credit score. So the absolute amount of available credit is important. You can't have it just one way.

We also need to keep in mind that part of the calculation for banks loss provisions is the credit score of their customers. The lower the score the more that has to be provisioned for.

This means the lenders usually have an interest in ensuring you have a higher score and as such are usually willing to provide generous credit limits. When times get tough (as they are now) those theoretical provisions start to become potentially real - so the credit lines get chopped.

 

[Mroze]

Same here. Received notice that my Chase Marriott Visa limit was being reduced by $25K as we haven't used it in over a year.
The rewards on the Bonvoy-Amex is so much better that we stopped using the Bonvoy-Visa.
The downside to this is that my Credit-Score could drop due to the change in %-Credit Utilized not because I used more but because less is available.

 

[controller1]

I think most businesses are baking it into their prices now but with the merchant agreements they can’t charge more for using a CC (although they can give a discount for using cash).

Actually, the prohibition to charge a surcharge for credit card purchases went away in 2013 through a court settlement of the Durbin Amendment. Merchants are allowed to charge an amount not to exceed the additional charge to the merchant for a credit card purchase. There are about a dozen states that prohibit such.

 

[jabberwocky]

Actually, the prohibition to charge a surcharge for credit card purchases went away in 2013 through a court settlement of the Durbin Amendment. Merchants are allowed to charge an amount not to exceed the additional charge to the merchant for a credit card purchase. There are about a dozen states that prohibit such.

Thanks for the correction. We still have the rule here in Canada. I haven’t kept up with the US rules as much since I moved back to Canada a decade ago.

 

[mdurette]

And here we go again - another card (infrequently used to be fair) dropping a credit limit.

On one hand, it is a good thing that we really don't need this credit space for now but I am keeping track of the issuers doing this for future credit use needs.
And cancellations.

In a perfect world, I would likely close several of our CC accounts that we don't really need or use but when the current credit model we operate under uses the amount of credit one has access to as part of the credit score calculation, the financial institutions that helped develop such a murky system should bear the cost of low activity customer accounts.

Grrrrr.. It's a Monday.

Did you recently ask for payment forbearance on anything? I have seen a handful of customers get their credit lines slashed or closed soon after requesting payment forbearance on something else like a car loan or mortgage. I get it......if you request payment relief on one debt the rest will be concerned that they are next and limit our exposure.

 

[bbodb1]

Did you recently ask for payment forbearance on anything? I have seen a handful of customers get their credit lines slashed or closed soon after requesting payment forbearance on something else like a car loan or mortgage. I get it......if you request payment relief on one debt the rest will be concerned that they are next and limit our exposure.

The events I related earlier in the thread happened back in about year 2 of being married - we are now approaching year 36 so I don't think that is the case here.
Your post does make me wonder something though - I wonder if the decrease in our overall available credit as a result of credit issuer A cutting the credit limit on our account with them collaterally caused other creditors to reexamine our credit worthiness. I could see a chain reaction sort of events occurring here - where the first cut caused a second credit issuer to reexamine our credit worthiness who then cut our credit limit, which then causes a third issuer to do the same - and the process continues.

 

[PamMo]

According to the website www.comparecards.com (sponsored by Lending Tree), 70 million cardholders have had their credit cards involuntarily closed or limits reduced in the last two months. That's on top of the 50 million who had them cut/reduced in April. Millennials and high income earners ($100K+) were the most likely to be affected. It's an interesting read.

About 70 Million Cardholders Had Credit Limits Cut, Card Accounts Closed Involuntarily In Past 60 Days

More than one-third of cardholders said they involuntarily had a credit limit reduced or a credit card account closed altogether in a 60-day period.

www.comparecards.com

 

[Talent312]

Am-Ex lets holders of multiple cards transfer credit among cards online.
Due to what I read here, I transferred $10K from a little used to a more frequently used card.
Thus, if they decide to close the little used card, I won't take much of a credit hit.

 

[PamMo]

^^^ That's a brilliant idea! ^^^ Keep your favorite cards active. AND, if your credit score is important to you, you won't want to lose a lot of high limit cards because it will push your utilization up.