when you make healthly repayments towards your credit card, why do they reduce the limit?

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my relative pays more than the minimum repayment to his credit card hoping his credit rating improves but they have reduced his limit, why?

5 Comments
  1. Reply
    dancing_smurf
    July 21, 2011 at 2:42 am

    Credit card companies routinely do risk assessments. It might be there were some purchases that concerned them such as an attorney, doctor payments, hospital payments, or other type of payments that might alert them. Also your relative may be paying more than the minimum but may be acquiring debt elsewhere that is being reported or may have missed a payment somewhere. The point that I am trying to make is this something concerned the card company and they reduced the limit in response to that concern.

  2. Reply
    jlf
    July 21, 2011 at 2:50 am

    That is now a widespread practice among credit card lenders. They are reducing their risk exposure.

  3. Reply
    MyOpinion
    July 21, 2011 at 3:48 am

    This is something new credit card companies are doing. Just like jacking the interest rates on excellent customers who are never late, always pay more than min balance and are responsible card users.

    Credit card companies have finally woke up and seen that giving a credit card to every person in America with a high balance was a mistake. The credit card companies are in financial trouble due to the number of people defaulting on their balances.

    Reducing the amount people are allowed to charge can help insure that the amount owed to them and then defaulted on is less. It’s not fair but the people they seem to be screwing the most are the best customers they have.

  4. Reply
    timothy p
    July 21, 2011 at 3:53 am

    creditors look at your entire credit history, not just the payment history of the account. Certain actions will trigger a reduced limit or a closure of account.

  5. Reply
    heybulldog
    July 21, 2011 at 4:51 am

    They are reducing the limit to make it easier for you to go over so that you will have to pay the $ 40 over the limit fee.

    Get rid of the card. Don’t worship the great fico. Both are designed to do nothing but get and keep you in debt.

    If you are responsible with your money and live on less than you make. If you pay as you go and save up an emergency fund you will have money and not have to worship the great fico.

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