CC company raised our limit. Can I ask for it to be lowered?

[v-girl]

So, I'm not the greatest at budgeting/keeping finances in check, but everything is paid every month and the credit card is paid off every month. Started with a $500 limit. Not a problem to pay off. Earned points. Worked fine. Now at $750. Used mostly for gas/groceries, and some fun. Still works out fine. I just checked the account because I get daily emails with the balance and it was $733 this morning. Checked to see what else was pending and to make sure we weren't going to go over.

Umm...the limit is now $2,500.

Can I ask them to lower it without hurting my credit (anymore than it is already hurt)? Or do I just need to make it a point to stop using it when I see it's at our financial limit? Ugh!

[Michele]

Try to stop using it when you reach your limit. Having the higher limit but not reaching it actually improves your credit. One of the factors in determining credit is a percent utilization score....so if your balance is 750$ but your limit is 2500$ then you are at 30%....but if you lower your limit to 750$ then you are at 100% and that looks worse.

[Michele]

One of the other factors for credit scores is length of history...and it's another reason not to cancel cards you aren't using. The length adds to your history and the available credit decreases your overall percent utilization.

[MrsK]

What Michele said. You don't want to lower your limit. A higher limit means a better debt to credit ratio. That translates to better credit scores.

[poky]

What they said. Companies offering credit want to know that you have some discipline with the credit you already have, and that you don't overspend and pay down regularly; the debt to credit ratio is one way they do that. If you don't use every bit of credit you have just because it's there, that's a good thing, from their perspective. You're already getting emails every day; I'd say when it gets to a certain predetermined point, put the cards physically away till the next cycle starts; that'd be the same as hitting your limit, but shows self-discipline, which is good.

[v-girl]

Ugh! I can do that Poky! I may have to physically put the card in the care of my mom or a very close friend, but I'm sure either of them would go along with it to keep me within my budget.

[corn poffi]

Thanks for posting this thread! My credit card limit is gigantic. Like WTF were you thinking giving a 24-year-old this ridiculous limit?!?!?! But when I got it, I was out of school, had a full-time job for a couple years, had been paying rent for five years, and had worked at a department store that made you have a credit card in order to get discounts. My BF got his first card when he was about the same age. He was in med school, had no student loans, and had a shorter rental history. His card's limit is 50 times less than mine. We went to buy furniture this weekend, and he didn't have enough left on his card, so we put it on mine. He didn't appreciate me looking like his sugar momma, so he decided he needed another card. He swore that high credit limits were bad and that you should try to spend as close to your limit as possible. He thought it was better for your credit to open another card. I told him he was full of crap. Now I know he is.

[MrsK]

yes, he is full of crap.

[SuzySunshine]

We applied for a new AmEx with our Costco membership a few weeks ago - the amount they approved us for is INSANE! The total we could go out and spend on credit cards now is almost as much as DH makes in a year, it really is ridiculous what they will approve you for.

[v-girl]

This card is only in my name. I don't even have a job!

[MrsK]

There are a lot of things that go into credit scores. Payment histories (rent, installment loans, etc.), income, collections, etc. Generally speaking, timely payment of secured installment loans like your mortgage or car loan will improve your credit. Paying off your credit cards and not carrying a balance from month to month is good too. Carrying a balance on your credit cards or having other unsecured consumer loans is not good.

You want to have about 2-3 credit cards and keep them current. Do not apply for a dozen different cards even if the store offers you 10% off for applying. It's okay to have a card for your favorite store but don't get cards for every place you shop. You are better off with a Visa, Mastercard, American Express, or Mastercard. If you have a bunch of cards, your credit score will be hurt by all applications and you have a greater chance of loosing a card or missing a payment. You are better off having a long history of timely payments with just a couple credit card companies. Never close a credit card account even if you don't use it because it will hurt your credit. Having a high limit is not a problem because of the debt:credit ratio we discussed before. Also, in an emergency, you may need the credit. (By emergency, I mean you have exhausted all possible options and you will be starving and homeless if you don't use the credit.)

If you don't think you can handle the credit responsibly, locking up your card is a good idea. Another thought is to carry a check register book with you so you can write down and keep track of your credit card purchases. You may even want to lock up the card and switch to cash. Give yourself a weekly allowance and when it's spent your are done.

[Thirteen]

This sounds crazy V, but... I have a container in my wardrobe and I confiscated credit cards when we got married. I am paying everything down aggressively, and I told DH to just "forget that we have them" until we can get ahold of it all. I have a low limit CC that I will occasionally put purchases on to keep things current, and he is on a loan with me that I pay and stay current on.
Do what you have to.

[v-girl]

Well, I guess this is a blessing. I wasn't going to order the bulk of our curriculum until September because...well...because it's almost $400 and shipping is not cheap from the curriculum company we use (Catholic Heritage Curricula). Just looked at the most recent email and saw directions on how to get free shipping until July 31. The code on page 3 of the catalog that was mailed this summer. Guess what was in the bottom of my last purse. Yep. Catalog. Page 3 has my free shipping code. So I can save $13 and order before the month is over. That's for media mail shipping. Takes up to 21 days. So I'd have our order before September. Hmm...I'm going to be up for hours thinking this one through tonight. LOL

[MrsK]

BTW, asking to have credit lowered would probably hurt your FICO score because it would look like you were denied credit.

This article is in this month's Real Simple magazine. It lays out some of the basics of credit scores: http://www.realsimple.com/work-life/...504/index.html