Credit card limit cut in half.

[Hangfire]

Received a letter in the mail today from Chase that said because I don't use my Visa card, that we've had for ages, often enough (they're right) that they are reducing my credit limit to $10,000.00 which is basically half.......no skin off my nose and I could pretty much care less.

Just wondering, is it normal for card companies to do this ?

 

[thor447]

Received a letter in the mail today from Chase that said because I don't use my Visa card, that we've had for ages, often enough (they're right) that they are reducing my credit limit to $10,000.00 which is basically half.......no skin off my nose and I could pretty much care less.

Just wondering, is it normal for card companies to do this ?

I think so. I have a Visa from Capital One that I keep for emergencies only. It had a 15k limit on it. I got something in the mail a few months ago stating that they've lowered the limit to $6800. I haven't used the card in years, but always kept it handy in case something happens.

 

[bigred1]

Never owned a credit card. Lots of offers for one. Nope, no thank you I always tell em.

 

[Dale00]

Consumer indebtedness levels may be spooking the banks......just speculating

 

[Preacherman]

I'm the guy that has my limit lowered on purpose.

 

[Okie4570]

If your info is stolen, they can only use it for $5k and not $10k.

 

[foghorn918]

Capital One cancelled mine without warning, because I hadn't used it. I only kept it for an emergency or if the one I do use didn't work for some reason

 

[swampratt]

I heard something on the news a few weeks ago that stated credit card companies were reducing the limits on cards because of all the out of work people due to the Covid.

 

[dennishoddy]

Never had mine lowered. They keep increasing it.
We pay it off 100% monthly so there are no interest charges incurred. Its a rewards card with American Airlines.
We have enough points accrued to fly anywhere in the world roundtrip first class. Been saving the points for many years. Gonna have to use them one of these days.

 

[-Pjackso]

It seems these sort of things (CC companies reducing credit limit) only happens in the bad times. After all - isn't a 'credit-limit' the entire purpose of their business plan? I remember this happened to me in the '08 crash also.

I always thought the (CC) banks have to maintain a certain ratio of (physical $) versus (leveraged $).
(i.e. for every $XXX dollars leveraged as credit (your credit limit) they have to balance it with $YY physical cash in the vault.)

To the bank, your credit limit is a potential debt on their books - even if you don't use the credit card.
So if they only have a finite amount of (cash-on-hand), then another way to meet the ratio is to reduce available leveraged $ - i.e. reduce your credit limit.


If this is correct - is it fair to think, the banks are hurting with cash-flow?