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.
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.
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.
More in Pocket Change
How to be Better at Work With a Job Makeover
You may start noticing some unpleasant occurrences as part of warning signals. When you see that your professional life is swinging...February 21, 2019
Porsche Makes in Six Seconds What Some US Employees Make in One Week
Staveley Head’s Report Two months ago, Staveley Head, a motor insurance provider based in the UK considered the financials of fourteen...February 21, 2019
How To Be Debt-Free in 2019
The yuletide in the air is almost fading away, yet we are faced with the big task of checking out our...February 21, 2019
Ariana’s Thank U, Next Beats Beatles’ Record after 60 Years
Ariana Grande is so talented that whenever she picks up a microphone, her voice sends chills down our spines. The gifted singer currently...February 21, 2019
Business Tips for First-Time Business Owners
Starting and owning a business is everyone’s dream. Yet, the road to achieving this dream is not all smooth. Most young...February 21, 2019
Celebrities That Get the Most Pay for Each Sponsored Instagram Post
It turns out that the social networking app, Instagram, known to a lot of people as a mobile application for sharing...February 21, 2019
Study Shows 40% of Millennials Do Not Prioritize Saving for their Retirement!
Most millennials today are enjoying their lives by eating out at fancy restaurants, buying their favorite expensive high-end gadgets or traveling...February 21, 2019
Watch Out for These Hidden Retirement Fees and How to Avoid Paying Them!
Most financial advisors advise their clients to save and build their retirement fund while they’re still young. Our retirement funds serve...February 21, 2019
How to Deal With Rising Insurance Costs
Most financial experts will advise the young workers to start saving early. If you save early, you’ll have more time, freedom,...February 21, 2019