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A Handy Guide on How to Behave When Your Credit Limit Gets Lowered


As per the user agreement, creditors are allowed to lower one’s credit card limits at will. Contrary to what many believe, this can happen to anyone. Having a good credit score does not necessarily exempt one from what would happen to someone else with bad credit. Loyalty to a particular bank doesn’t also necessarily distinguish one from the rest of the pack.

Individuals who often make late bill payments, have collection accounts and file for bankruptcy are the most likely people to have their credit card limits lowered

Most people tend to be caught unawares when the credit card limitations take effect. Experts in the field often cite that the best practice is to always have about 30 percent stored up in order to max the credit score. This means that individuals with limits of about $3,000 need to ensure that they spend no more than $900 at a go. When the limit gets lowered in an instance, it could have a profound effect on one’s credit score.

Usually, when this happens banks and card issuers tend to send over a letter to recipients. Once all this gets into play, one needs to be smart about their next steps. We’ve compiled a handy guide to ensure for a smooth process.

Contact the Issuer

Even after the card issuer reaches out with a mailed reason, one needs to contact them via phone and seek clarification on the matter. Guiding questions can help one resolve through any issues of probable cause. Querying if there have been particular patterns they’ve noticed or their suspicion on the rate of spending can help one gain a comprehension of whether or not they were walking credit risks. At the same time, doing this also helps the card issuers verify that the deduction was not made in error.

Importantly, one should always seek to find out if it’s possible for the card issuers to reinstate back the account to its initial level. To really impress upon them, one should make references to good past behavior and mention a thing or two about loyalty through the years. By using emotional intelligence to connect, one can ably call upon the human aspect to sort things out.

Monitor Credit Utility

Whenever the credit card limit gets lowered, one should seek to pay off their bills in order to maintain the standard 30 % credit utilization rate. As per the rules, right after one’s credit limit gets lowered, it’s impossible to get charge with a higher fee than the new figure in a single billing cycle. What this means is that one can’t pay up any penalties or fees right after.

Typically, a waiver lasting about 45 days is imposed once one receives a notice of the reduced credit card limits. Taking advantage of this grace period to reduce the frequency of credit utilization can have a profound effect on the perception created

The internet is full of resources that can help anyone get back on their feet and maintain ground level credit utilization rates. Ideally, this should become a habit for a couple of months. Those who find such tasks as arduous can alternatively opt to conduct a bank transfer of their funds to avoid exceeding the credit card limits.

Once trust is established, one should strive to follow up on the matter with their credit issuer. Often times, they check on one’s recent history to determine their creditworthiness. Having been on the mend, they will likely feel compelled to increase the credit limit. During this phase, one should never exhibit tell-tale signs of frustration. Patience is a virtue.

Activity is Good

At times, people’s credit limits get lowered because the cards weren’t being used. In such situations, one should strive to link the card to a couple of recurring subscriptions like Netflix and Audible. In so doing, the account will stay active for a long period. It’s wise not to risk having the credit card limit lowered or getting the account closed since this could have a detrimental effect on one’s credit.

Remarkably, this is an excellent strategy since those subscriptions typically only cost a couple of dollars every month. Thus, such actions are sustainable. Making small partial payments promptly ensures that one does not accrue any interest or pick up extra debt luggage.

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