I am repaying it, but fearing that I would get into a debt trap, I reduced the credit limit to Rs1 lakh from Rs2 lakh," said Sinha, adding his credit card spends were around Rs1.2 lakh a month. Since then the money has been frozen on the card and I … Closing the card would likely negatively affect the length of my credit history — another factor used to determine my credit scores. Even with a reduced limit, the card is still contributing to your credit score. “You’ve got to keep all your cards in good standing. If your credit limit is reduced but your spending remains the same, your utilization rate will increase. A credit limit decrease can hurt your credit score by increasing your overall credit utilization if you’re carrying a large balance on your card. I also added the card to my Apple Wallet so that I can occasionally use it for other purchases. this is my first credit card. check your VantageScore 3.0 credit scores. This site may be compensated through third party advertisers. Aqua Suddenly Reduced My Credit Card Limit Written by Karen Bryan I was rather annoyed when I received a letter from Aqua informing me that they’d reduced the credit limit on my Aqua Reward Credit Card from £1,600 to £800. Most cardholders are seeing their credit limits to either $5,000 or $1,500/$2,000 depending on the card and other factors. Here's how the math breaks down: Imagine you have five credit cards. The provider of your new card might not even let you transfer enough debt to hit your credit limit. If a credit bureau mistakenly mixes your file with that of another consumer – perhaps because you have the same name – that person’s troubled credit history could make you look like a bigger credit risk than you really are. In my case, it wasn’t a huge deal that my credit limit was lowered because I have a handful of other credit cards with high credit limits and my overall debt is very low. Lower credit utilization rates can suggest to creditors that you can use credit responsibly, so a low credit utilization rate may be correlated with higher credit scores. In my experience, there has always been a relationship between my credit scores and the credit limit on my credit card. If you’ve recently suffered a financial setback that prevented you from making a payment on time or keeping your balance at a reasonable level, explain the situation. This is because your credit utilization ratio accounts for about 30% of your credit score. Ed Mierzwinski, U.S. Public Interest Research Group. Credit Scores and Reports “Life happens, and if you call them and explain, ‘This is what happened, but there’s the plan’ you’d be surprised how helpful it is in dealing with these credit card companies,” she said. If you've a lower income and/or a poor credit history, you're likely to get limits starting around £200 with a maximum of £1,500. You may need to pay the current balance off completely. Copyright © 2021 CreditCards.com a Red Ventures Company. Ask the customer representative for an explanation. The offers that appear on this site are from companies from which CreditCards.com receives compensation. The offers that appear on this site are from companies from which CreditCards.com receives compensation. If you apply for a credit card, the lender may use a different credit score when considering your application for credit. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials. Advertiser Disclosure, Your issuer can lower your credit limit at any time, and it can hurt your credit score, by Credit card utilization is one piece of the puzzle, but it’s by no means the whole puzzle. Reasonable efforts are made Asking here because it's impossible to get through to MasterCard right now. Call your credit card company and ask for an explanation. Other factors, such as our proprietary website's rules and the likelihood of applicants' credit approval also impact how and where products appear on the site. When the bank lowered your credit limit, your debt-to-limit ratio increased. Claire Tak has a background in editorial content marketing and strategy and writes about credit cards, paying off debt and saving money. Starting credit limit from £250 to £1200. It’s accurate to the best of our knowledge when posted. Getting your credit limit lowered is something that may be out of your control, but if it happens, take the right steps and be vigilant about checking your credit. Initially the limit cut 1700 so I was over limit. maximum initial credit limit. balance!, Inc. NMLS ID # 1628077 | mobile browser the new pass-through might! The reason for the Aqua card account or a fraudulent account and make on... 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