Credit Limits – Can Yours Be Reduced

Most people understand that their credit limit is the maximum amount they can borrow from their credit card issuer.

What many don’t realize, however, is that credit card companies can and do change credit limits quite frequently. In fact, it’s not uncommon for a credit limit to be reduced without any prior notice.

If you have had your credit limit reduced, you may be wondering why this happened and what, if anything, you can do about it. Here’s what you need to know.

Why Would My Credit Limit Be Reduced?

There are a few reasons why your credit card company may have decided to reduce your credit limit. One possibility is that you made a late payment on your credit card bill or went over your credit limit.

Either of these actions could result in a lower credit score, which in turn could prompt your credit card issuer to lower your credit limit.

Another reason your credit limit may have been reduced is that you’ve been using your credit card more frequently than usual.

If you typically only use your credit card for occasional purchases and all of a sudden start making several charges every week, your credit card company may be concerned that you’re starting to rely on credit more than you can afford to pay back. As a result, they may reduce your credit limit in order to prevent you from accumulating too much debt.

Finally, it’s also possible that the reduction in your credit limit is simply due to a change in the way your credit card issuer evaluates creditworthiness.

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Credit card companies periodically review their customers’ credit reports and may lower credit limits for those they feel are no longer good risks.

What Can I Do If My Credit Limit Is Reduced?

If you’re unhappy about reducing your credit limit, there are a few things you can do. First, check your credit report to make sure there is no mistake.

If your credit limit has been reduced due to late payments or going over your limit, taking steps to improve your payment history and keep your balances low could help you get your credit limit increased again.

You can also try asking your credit card issuer to reconsider their decision. It’s possible they may be willing to increase your credit limit if you explain that the reduction is causing problems for you or preventing you from using your card in the way you’d like.

Be aware, however, that there’s no guarantee your credit card company will agree to raise your limit, even if you do ask.

If you can’t get your credit limit increased, you may need to look for a new credit card. There are plenty of cards out there that offer higher limits, so finding one that meets your needs shouldn’t be too difficult.

Just make sure you compare offers carefully before applying to make sure you’re getting the best deal possible.

Conclusion

Credit limits can be reduced for a variety of reasons, so it’s important to stay on top of your account and keep an eye on your credit report.

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If your credit limit is reduced and it causes problems for you, try asking your credit card issuer to reconsider or look for a new card with a higher limit.

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