Can credit card companies cancel your card or lower limit if you have lots of outstanding debt?

Question

My one Juniper card got it's limit lowered from $1000 to $250, which isn't much anyways to begin with, just because I was carrying a $4500 balance on my one Citicards card, which had a limit of like $1500, AND I've paid that off halfway its around $2500 now anyways. Most likely will be paid in full in the next few months.

Otherwise all my other credit cards, I have several, have $0 balances, and I'm on good standing.

Is this common, for creditors to DECREASE limits or possibly cancel/close the account for you?

Is a credit line decrease a possible SIGN that they're pending termination of your account, or at least a sign that they don't hold you in good standing?

WHOOPS. MAJOR typo. Up above I meant my citicards card had a credit limit of $15,000.

Answer 1

it is legal, yes. your deal with the credit card company is voluntary on both sides, so they can change or terminate it on 30 days notice.

My guess is that Juniper noticed that you have a 15k card at Citi and that their service with the 1k limit is, therefore, quite redundant. They may have noticed that you are pyaing off the charges in full every month and decided that because you do so, they don't want your business. [since lending to people who do not pay off their card in full every month is very profitable, I understand]

does this help?

Answer 2

If they see you're being risky with other credit cards they might be next. If you have a late payment on another credit card any of your credit card creditors can increase your rate, decrease your limit or even close the account. If it shows on your credit report "closed by credit grantor" thats a negative. Why do you have so many credit cards anyway? If you don't use them close them and keep your score up. A lot of open unsecured debt even with no balance is not a good thing.

Answer 3

yes they have the right to review your credit history most company do that on a 3month base and adjust your limits accordingly. as well as your interest. but that's usually done to lower your interest. a raise can only accrue in writing or it you go over the limit or miss a payment or late. in most cases lowering your available credit is a good thing especially if your buy a house or car. say your approved for 100000.00 they take what you have avable to spend in your credit limit and deduct that from the fig so you would have to come up with more money as downpayment if your credit limit is lowered and your not over the limit thats makes you a better credit risk cause they think ok i give u 100000 and tomarrow you go and rack up the rest of your avalble credit you want beable to pay me back. i hope i explained it ok for u not to good at try to draw a pic sorry . Good Luck

Answer 4

Yes they can. They can raise the interest rate you pay too. They make all the rules and can change the rules in the middle of the game.

cut up and cancel. Don't obsess with your credit (I Love Debt) score.

Debt Free is definitely the way to be.

Answer 5

They certainly can - thanks to the Universal Default Law. This states that credit card companies can raise your monthly payment, raise your interest rate, close your account or lower your limit based on your performance (payment history) with other cards and accounts.
There are usually clauses in the credit card contracts when you sign them stating that you agree to make yourself subject to this law.

Answer 6

Now days you can be late on one payment and they can change the whole game plan on your card .with out your consent. They look at your credit report and see what you make and how much you charge.
Even if you are on time with all your payments they can call you a possible credit risk if you have what they call to much debt as to what you make.

Answer 7

Yes, they can cancel or reduce limits. The credit card belongs to them, and they can pretty much do as they like.

Answer 8

Yeah, they have the right to check your income-to-debt ration, unless you get a card that does not have that. I am not sure what the clause is, but most people overlook it. I'd say ask the cc company and ask them for that clause.

Once you know it, then stay away from companies that use it.

Answer 9

Many credit cards now are putting in its fine print" We can change your terms at any time for any reason" I just read that on an Advanta card application.

Answer 10

yes