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Discover Card Lowered My Credit Limit… But My Credit Score is 750?

December 1st, 2008  |  Published in Credit Cards, Financial Crisis  |  9 Comments

I have officially been hit by the credit crisis.

According to a letter I received from Discover Card today, my credit card limit has been reduced by $2,500 ($7500 to $5000).  Even though I have an excellent credit score in the mid to high 700s, I’m not immune from a credit limit reduction.

I’m not exactly a frequent user of my Discover Card, or any credit card for that matter, but I do rely upon it for convenience purchases like buying gas and groceries.  Just a quick swipe and sign, and I’m off and running without standing in line or waiting for a cashier to give me my change.

Reasons Why I’m Perplexed with My Credit Limit Reduction

  1. I never carry a balance.  Last time I did was probably in 1999-2000.
  2. I use my card about 3 to 5 times per month.
  3. I have a very high credit score in the 750+ range.
  4. I pay my balance on time each month.  Generally the day I receive an email saying my balance is due.

According to the letter, the credit limit reduction was not in any way related to my past payment history but a corporate decision to reduce what I would call “risk tolerance”.  Based on my stats, I would presume that I’m the poster child for repaying one’s debts, but apparently I’m no longer a risk they are willing to take.

Just goes to show that everyone, even the same people who were begging to loan you money just a few months ago, are now tightening their belts in this financial crisis.

Fortunately, I’m not reliant upon my credit cards to meet any financial obligations.  Otherwise, I would presume that I could call and ask for my credit limit to be reinstated, but this isn’t a necessity.  In fact, I’m curious why I left it so high to begin with so perhaps this is a good thing after all.

…

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  1. Mr. CCNo Gravatar says:

    December 2nd, 2008 at 12:48 am (#)

    Matt!

    I am sorry to hear that this happened to you.

    Mr. CC

  2. MattNo Gravatar says:

    December 2nd, 2008 at 12:54 am (#)

    No worries… I find it somewhat laughable. Maybe they wanted to redistribute their risk tolerance to customers who actually used their credit card more than I did.

  3. PennyScraperNo Gravatar says:

    December 2nd, 2008 at 6:25 pm (#)

    Matt
    Are you carrying any debt? Then your debt to available credit ratio just went up.Your Fico score may be affected.

  4. MattNo Gravatar says:

    December 2nd, 2008 at 8:32 pm (#)

    @ PennyScraper

    Other than a low fixed rate mortgage, I’m debt free. Strange isn’t it?

  5. The Money Hacks Carnival: The Best Crazy-Simple Money Hacks Edition | Ask Mr Credit Card's Blog says:

    December 3rd, 2008 at 8:34 am (#)

    [...] Steadfast Finances has a tale about how Discover Card Lowered His Credit Limit… But His Credit Score is 750? [...]

  6. The Money Hacks Carnival: The Best Crazy-Simple Money Hacks Edition | Credit Material says:

    December 3rd, 2008 at 12:08 pm (#)

    [...] Steadfast Finances has a tale about how Discover Card Lowered His Credit Limit… But His Credit Score is 750? [...]

  7. TheCreditToolBox.com » Blog Archive » Credit Around The Blogosphere says:

    December 7th, 2008 at 8:30 am (#)

    [...] Steadfast Finances has a tale about how Discover Card Lowered His Credit Limit… But His Credit Score is 750? [...]

  8. Best Reads and Impatiently Awaiting Decision on the Big Three Bailout. :: Steadfast Finances says:

    December 7th, 2008 at 11:56 pm (#)

    [...] are beginning to cancel inactive or lesser used credit cards.  I personally had one of my credit card spending limits reduced this month, so I can certainly relate to the frustration even though it is a non-issue for [...]

  9. Why Are Credit Card Companies Lowering Your Credit Limits? | Ask Mr Credit Card's Blog says:

    March 8th, 2009 at 7:38 pm (#)

    [...] of our readers, Matt, even did a post on his blog, Steadfast Finances, about the limit on his Discover Credit Card being reduced from $7500 to $5000 - and he has a 750 [...]

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