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CC | Decreasing Our Credit Limits?

I was watching Suze Orman show. Most U.S. credit cards are nowslashing the credit limits of its card holders. For example your credit limit is 50k and your OB is 25k. The card companies will make your credit limit just 30K. Will they ever apply that here? Personally i dont think so.... your opinions guys?
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Comments

  • danica00danica00 Member PExer
    HSBC just increased mine twice the past 6 months unrequested so I don't think so. Of course it's on a case to case basis, depending on your spending and payment history.
  • leela1025leela1025 Member ✭✭✭
    well, according to suze orman, US credit card companies reduce the credit limits of cardholders because they see these cardholders as risks. cardholders who pay only the minimum amount every month are red flags because it means they can't afford the credit card payments. so to prevent the credit card companies from being exposed to these "minimum payment" cardholders, they'd rather reduce their credit limits. example, dahil 30K na lang ang credit limit mo, hindi ka na makakapagcharge ng additional expenses. ibig sabihin, maliit lang yung isho-shoulder ng credit card.

    also, reduced credit limits mean a decrease in the FICO scores of these cardholders. 30% of the FICO score is made up of the ratio of the your credit balance to total available revolving credit. the bigger the difference between your balance and the your revolving credit, the better your FICO score. the smaller the difference, the lower your FICO score. a low FICO score means the credit card company (and other lendors) can jack up the interest rate of your debt.
  • KuyaDannyKuyaDanny Moderator PEx Moderator
    I think local credit card companies will be more discriminating when they review credit limits. Delinquent accountholders and maybe those who are maxed out might get their limits cut, while disciplined payers will get increases.
  • jay372011jay372011 Member PExer
    Mabuti naman pala kung ganoon. Ingatan na lang siguro natin na hindi tayo mag over due at dapat magbayad on time.
  • Mark T. MarketMark T. Market Polymath PExer
    Top banks like Citi and HSBC have automated systems that review spending patterns and payment behaviour. If your account gets flagged as a potential bad payer, the bank will immediately decrease your limit to prevent losses.

    However, if you're worried enough about this, chances are you're not at risk--since you're probably still paying and using your card.

    Meanwhile, those people who are about to or are on the verge of deliberately defaulting--they wouldn't care less about limit decreases since they've probably already near-maxxed out their limits. These are the people the banks love to identify beforehand.

    The system is usually based on a genetic algorithm--it isn't perfect--but is constantly learning based on new data. So mistakes can happen--but with each new case and a complaint, risk profiles are perfected.
  • knightraderknightrader Member PExer
    I am US-based, have no debts and pays the balance in full before the grace period is over. My total credit limit with credit cards is over $100,000 and the banks have increased the credit limits almost every year without me asking for it. You think I'm safe from a bank decreasing my credit availability? he-he

    Recently some of my credit cards were closed by a bank because of inactivity. They were closed because I am not using it!!! I think the banks are cutting their exposure across the board. I think the derivatives nightmare is only beginning. There is a reason why the central banks are risking hyperinflation... the debts and derivatves risk is so great that it can't be paid or covered by increased productivity!! The only way to wipe out debts clean is through inflated currency. Think of this way, can debts be a problem to a country willling to print enough money as needed??

    The credit crisis affects all. Don't be fooled that only the deadbeats are being penalized by this Anglo-Saxon induced crisis.
  • leela1025leela1025 Member ✭✭✭
    ^knightrader, there is always a possibility that your credit limit can be reduced. but if you are a good creditor and you pay your balances in full every month, i doubt that your credit limit will be reduced.

    but regarding your CCs that were closed by your bank because of inactivity, have you recently checked your FICO score? your credit limit to outstanding balance ratio may have been reduced because of this. and this will affect your FICO score. but if your FICO score is still the same, then all is still well.
  • knightraderknightrader Member PExer
    leela1025 wrote: »
    ^knightrader, there is always a possibility that your credit limit can be reduced. but if you are a good creditor and you pay your balances in full every month, i doubt that your credit limit will be reduced.

    but regarding your CCs that were closed by your bank because of inactivity, have you recently checked your FICO score? your credit limit to outstanding balance ratio may have been reduced because of this. and this will affect your FICO score. but if your FICO score is still the same, then all is still well.

    I have lines of credit besides credit cards. I have no problem with credit as we use them for business everyday. The company credit is in the millions. The bank that closed the credit cards are having problems but they are approaching it the wrong way. My credit is excellent but I have multiple open lines of credit that I never use. These are cards that banks just send to me pre-approved with a book of chekks to access the credit. My credit card lines are still in the 6-figures. I really don't use the credit cards that much and pay them in FULL every month. The banks here in the US are scared and they are coming up with ways to cover their mismanagement and risks. I could care less for banks who are one-dimensional in their approach and cannot see the long-term consequences of their actions. I have closed many credit cards on my own because thay decide to charge me annual fees. The good ones provide me with perks like cash rebates, airline miles, discount merchandise, free trips, etc.

    We use tremendous leverage in our business (trading stocks/options) not only for NO interest but we actually get paid to trade as we provide liquidity.

    It is a different ballgame here in the USA. Those banks who make mistakes in not knowing who their good customers are will not last. Just because someone do not use their credit cards is not reason to close them. I do not even have a mortgage!! But I own a home and have enough financial resources. If these banks don't shape up and figure out what they are doing, they are lucky if I don't close the account first. I have about 15 credit cards, both consumer and business but I only use 2 most of the time and pay them in cash every month. Credit cards are just tools, not a source of spending money. I am not alone in this. Some of my friends have the same experiences and they own their homes free and clear and have enough financial resources to more than weather this crisis. We have no sympathy for the flight of the banks who created their own demise. :)
  • leela1025leela1025 Member ✭✭✭
    sakto sa pinag-uusapan natin.

    http://finance.yahoo.com/banking-budgeting/article/106716/How-to-Blow-Your-Credit-Limit-Without-Spending

    If you haven't had the credit limit cut on your credit card recently, count yourself lucky. Risk-averse card issuers are getting slash happy. And while many cardholders gripe that such cuts slice razor-close to their balance amounts, for an unfortunate few the cuts go far deeper: below what they currently owe.
  • bluesoda00bluesoda00 Salamat po!!! PExer
    naunahan ako. :rotflmao: was supposed to post this since i read this just this afternoon. really helpful topic. pati yung myths on having a credit card ok din yun.

    going back to the topic, i dont know if its just me pero kanina i called up standard chartered kasi ipapa cancel ko na yung card. ayoko kasing magbayad ng annual fee at mababa limit nito (15K). so trinansfer ako nung kausap ko sa cancellation department (meron palang ganito and inadress yung concern ko. straight to the point sya, hindi pwedeng i waive yung annual fee kasi na redeem ko na yung points ko ng ayala cinema tickets two weeks ago tpos ang total spending ko lang sa card e less than 60k. bale may credit pa akong 45 (overpayment). sabi ko ok lang kahit di na ibalik yung 45 pesos basta cancel na lang. tinanong ako kung yung annual fee ba reason pagpapacancel, sabi ko secondary lang yun, yung limit yung concern ko. in a matter of seconds sabi nya, sir i can automatically waive your annual fee and will request for limit increase. mas magnda sana kung may iba kayong card para di na kayo magsusbmit ng requirements. syempre nung una pakipot pa ako pero eventually i gave my hsbc which has 100k limit. sabi nya ok sir i understand why you wanted to cancel it since malaki nga yung gap between the two cards. As of this conversation, nawaive na yung annual fee nyo and i already forwarded the request to have the limit increased, kung di man matapatan yung sa hsbc nyo, enough to make you stay. as it is MAGANDA PO YUNG RECORD NYO SA AMIN! tapos ang boxing.

    ang ipinagtataka ko lang e me times na naging revolver din ako dito (mga 3 months) tpos bihira ko naman gamitin since wala masyado perks. pano ako naging maganda ang record? in relation to the thread, well obviously hindi po ako binawasan ng credit limit...hehe
    leela1025 wrote: »
    sakto sa pinag-uusapan natin.

    http://finance.yahoo.com/banking-budgeting/article/106716/How-to-Blow-Your-Credit-Limit-Without-Spending

    If you haven't had the credit limit cut on your credit card recently, count yourself lucky. Risk-averse card issuers are getting slash happy. And while many cardholders gripe that such cuts slice razor-close to their balance amounts, for an unfortunate few the cuts go far deeper: below what they currently owe.
  • leela1025leela1025 Member ✭✭✭
    ^baka you always pay in full every month?
  • bluesoda00bluesoda00 Salamat po!!! PExer
    hindi po. as what i stated, me 3 buwan din akong nag revolve at na max out yung credit limit. wala daw kasing masyadong nagaavail ng standard chartered kaya siguro pinagtyagaan ako hehehe...
  • leela1025leela1025 Member ✭✭✭
    ^hahaha! that's funny! at least, valued customer ka. :lol:
  • bluesoda00bluesoda00 Salamat po!!! PExer
    leela1025 wrote: »
    ^hahaha! that's funny! at least, valued customer ka. :lol:

    i like this statement! you better watch confessions of a shopaholic. yan na yan ang line - 'they used to treat me as a valued customer, now they send me hate mails'...:lol:
  • knightraderknightrader Member PExer
    Just want to share this news to people who think Americans with perfect, pristine credit score cannot have their credit card cancelled for inactivity...

    Credit cards: Use them or lose them
    If you don't charge anything (or don't charge enough), some card issuers will cut you off, often with no warning, and your credit scores could take a hit as a result.
    By SmartMoney

    ...One of the biggest causes of the financial crisis was that Americans were borrowing (and spending) more money than they could afford to pay back.

    So how are credit card issuers reacting to consumers' attempts to live a more financially responsible lifestyle? They're threatening to cut their credit cards off if they don't spend enough.

    Loretta Maxwell of Troy, Mich., had thought her credit score of 790 would buffer her against most of the fallout of the credit crunch. When Chase closed her $6,000-limit card in December without warning after two years of inactivity, she called to fight it. She was unsuccessful.

    "If you're not using it, they entice you to do so, and then the moment you don't spend enough, they cut your limit," she says.

    http://articles.moneycentral.msn.com/Banking/CreditCardSmarts/credit-cards-use-them-or-lose-them.aspx
  • Strong7PowerStrong7Power Member PEx Moderator
    Sa HSBC, ganito raw!
  • pokemonaddictpokemonaddict Member ✭✭✭
    Sa HSBC, ganito raw!
    PNB and Chinabank din daw. 
  • piquanteyepiquanteye Member ✭✭✭✭
    Totoo ba pati PNB? Why oh why?

    Buti na lang sila Bankard, EWB, Citi sobrang generous..
  • Strong7PowerStrong7Power Member PEx Moderator
    Sa HSBC, ganito raw!
    PNB and Chinabank din daw. 
    Sa anong dahilan?
  • pokemonaddictpokemonaddict Member ✭✭✭
    edited March 16
    Totoo ba pati PNB? Why oh why?

    Buti na lang sila Bankard, EWB, Citi sobrang generous..
    May nabasa ako dati sa PNB thread. Need daw gamitin monthly si PNB kahit any amount para maiwasan yung decrease. I think it's also in their T&C but I never read it anyway :lol:

    Sa HSBC, ganito raw!
    PNB and Chinabank din daw. 
    Sa anong dahilan?
    Non usage for how many months or minimal usage. 
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