This credit card company raised my rate by over 5% when everyone else is lowering mine and won't reduce it. So, I am in the process of paying off this card. I made a large payment ($2,500) and they raised my limit from $8,500 to $13,500. I want the limit to be put back to the original $8,500 and I don't want anything more to do with this company. But, will it hurt my credit score to lower it back to where it was 3 days ago? My FICO is around 750 now. Do you think I would need to get the limit reduced back before they cut another statement?
Thanks,
Judy
2006-12-30 08:39:17 · 9 answers · asked by Iowa Cajun Girl 1 in Business & Finance ➔ Credit
Keep the rate allowed as high as possible. When you show a debt of $2,000 with a credit limit of $5,000 that shows a 40% usage of available credit. If your limit were doubled with the same debt, you show only a 20% usage. That shows you have used restraint and are a wise user of credit.
The old school of thought was to not have a high limit on credit. It has been discovered that a better way to determine allowable credit is to check what personal restraint has been shown by the customer.
2006-12-30 08:51:28 · answer #1 · answered by jpbofohio 6 · 2⤊ 2⤋
Your record of one time payments will affect your score more than anything they do to your credit limit. That said CHANGES to your credit limit don't affect your score. The ACTUAL limit does. In other words, if they restore your original limit, the effect on your score will be the same as if they had never changed it. If you really want nothing more to do with the company, request the account be "Closed at Customers Request". I have done this with half a dozen cards over as many years. As of Dec 22, my Transunion FICO score was 759. People will tell you closing the card will hurt your score. My experience tells me they are confused.
2006-12-30 16:54:12 · answer #2 · answered by STEVEN F 7 · 0⤊ 1⤋
Paying down the debt and the CC raising your limit increased your credit score. You should charge no more than 30% of the limit on any card to have a good credit rating.
2006-12-31 02:48:33 · answer #3 · answered by Steve R 6 · 0⤊ 1⤋
When someone looks at your credit rating.. and the details it will show the limit raised for a time and then lowered... it will NOT say that you chose them to lower it. Any future lender will look at it like the card company decided to lower it back down. It will have a large scare factor if they look at your rating in detail.. and it will definately drop your FICO score. Just leave it and cut the card up in tiny pieces and burn it.
2006-12-30 16:51:21 · answer #4 · answered by B G 2 · 0⤊ 1⤋
Forget about the credit limit. 8,500 to 13,000 it is no big deal. I can understand that if you felt 13k was enough you could ask them to status your account such that your credit line is permanently frozen. If the customer service area can't do it, the credit depatment can. You simply explain 13k is more than enough credit for you. If they don't then just don't use the account or close it.
As far as the rate, the only way to manage credit card rates is to pay off the account. Then you call in for a lower rate, if they can't do it don't use that account for a year or close it.
2006-12-30 20:26:49 · answer #5 · answered by Gatsby216 7 · 0⤊ 1⤋
If the 750 is with the 13,500 - yes
If it isn't - no.
It's the debt to credit availability ratio that would affect you the most.
IE: How much credit is available / How High your credit limit is
The larger the percentage, the better off you are in terms of scoring.
2006-12-30 16:50:33 · answer #6 · answered by Alyssa 5 · 1⤊ 1⤋
This is Bank of America isn't? They will not lower your APR. Once is goes up it never goes down, unless you do a balance transfer from another credit card and they might lower it to more satisfactory APR.
If you want a reduce in your credit limit, call them before the next closing date, that is when the account activities are reported to the credit bureaus.
2006-12-30 16:48:37 · answer #7 · answered by lelekid4ever 5 · 1⤊ 1⤋
Yes reducing limit will increase utilization % and lower your credit score.
2006-12-30 16:46:41 · answer #8 · answered by Anonymous · 0⤊ 2⤋
In your scenario......it will not hurt your FICO score......DEMAND that they lower the limit and put a restriction on automatic credit line increases........if not.......XFR the balance to another card.....this does sound like Bank of America....I had their card six weeks and closed it............
2006-12-30 19:28:11 · answer #9 · answered by Paula M 5 · 1⤊ 1⤋