2007-02-27 10:59:53 · 7 answers · asked by Anonymous in Business & Finance ➔ Credit
That is pretty bad. Credit is a very impotant thing. When people are young it may not seem that important but once you try to buy something thats when the credi demos shows it ugly head. You will need credit to buy a house, a car and even some electronic goods. You get better treatment when you have good credit because itmeans you are a reliable person.
2007-02-27 11:03:15 · answer #1 · answered by mr_gees100_peas 6 · 0⤊ 0⤋
If you are paying bills on time and paying off or paying down debt, some credit card companies do not like this. My daughter encountered a cc company that did this to her. She sent them a large payment and a few weeks later, went to make a small purchase and they had lowered her credit limit. Read the fine print very carefully because it was listed there that the company could lower the credit limit. It was a company that charged an annual fee and had a high finance rate too. It was very embarassing to her to have almost paid off the account and then she couldn't use it. That particular company is looking for customers that can drag out the debt and earn them money. She wasn't earning them any money.
2007-02-27 21:04:39 · answer #2 · answered by kriend 7 · 0⤊ 0⤋
Its a sign that they feel you are an increasing credit risk. Some companies periodically review your credit file and decrease your credit based on your credit score. Some decrease your credit line based on your past use of their card.
Its not good to keep it maxed out, and always pay more than the minimum.
Just remember, if you cant pay cash for something , you shouldnt be buying it.
2007-02-27 19:04:15 · answer #3 · answered by Martin 1 · 0⤊ 0⤋
1. Here is how lowering your credit limit will hurt your FICO credit score. 30% of your FICO score is based on your credit utilization percentage, that is, for your revolving credit lines, the percentage of your credit limit that you currently have in use. Example: if you have a $5,000 limit and $1,200 balance on the card, your utilization is (1200/5000)*100 or 24%. Now, suppose they cut your limit to $3,000: your utilization is (1200/3000)*100 or 40%. Generally speaking, a utilization percentage of 30% or less is good. Above 30% to 35% can hurt your score, and above 50% in some cases can set off the dreaded Universal Default clause in your credit card agreement. Above 100%, you will pay the over-limit fee discussed in your card agreement. Which leads us to ... 2. By lowering your limit, the cc company makes it easier for you to exceed your limit and makes it more likely for them to collect their over-limit fee. Read your bill, watch your balance, pay your bills on time, and eventually, the cc company might allow you to raise your limit in the future.
2007-02-27 19:22:37 · answer #4 · answered by VT 5 · 0⤊ 0⤋
It's not good. Check your current terms--ask for them in writing as soon as possible--because they probably changed those as well. My friend had her terms changed recently and they bumped her interest rate to the max allowable...23.5%. She has excellent credit but the lender said there was a recent negative report on her credit report. She found out it was in error and is working to get it fixed but the card lender won't budge.
I'd suggest closing your account (that doesn't hurt your credit score) and paying them off as soon as you can.
Take care.
2007-02-27 21:15:56 · answer #5 · answered by chaimail04 2 · 0⤊ 0⤋
just means ur credit score dropped and they saw a red flag so they decided to lower ur limt. not a good thing but it can be fixed. pay ur bills ontime
2007-02-27 19:03:01 · answer #6 · answered by bigizz75 4 · 1⤊ 0⤋
Not bad at all if you never reach the limit.
2007-02-27 19:03:40 · answer #7 · answered by CctbOh 5 · 0⤊ 1⤋