Is there any practical reason to request a lower credit card limit?

Question

I just got a credit card. They set the limit at $10,000. I'm sure I'm never going to put more than $2,000 on the card. Should I call and have the credit limit lowered? Why?

Answer 1

If you feel more comfortable to carry a card with lower limit, you certainly can call and lower the credit line. It only takes less than 30 second to lower the credit limit. However, in the future, if you need to use the card for more than $2000, then credit card company has to check into your credit report before they can increase the credit line.

You're not responsible for any fraudulent charges on the account. Some people are afraid if they loose the card with a higher credit line, they'll be responsible.

If you have only one or two credit cards then $10.000 is not a whole lot.

Answer 2

I think that sometimes, too much credit can actually lower your chances of getting a loan. For example, if you have $2000 on your card and you have a $10K limit, a bank will look at that as another potential $8000 in debt you could accumulate. If you owe $2000 on a card with a $5000 limit, then you can only accumulate $3000 more.

Of course, this is only one of many factors involved when you apply for a loan. It may not make enough of a difference to change a yes to a no when you apply for a loan.

Answer 3

Unless you don't trust yourself with that high of a limit there really isn't any practical reason to have it lowered. Obviously you have good credit of you wouldn't get that high limit. As long as you continue to be prudent with your spending you should never have a problem with your card limit.