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
- I never carry a balance. Last time I did was probably in 1999-2000.
- I use my card about 3 to 5 times per month.
- I have a very high credit score in the 750+ range.
- 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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Photo by TheTruthAbout
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December 2nd, 2008 at 12:48 am (#)
Matt!
I am sorry to hear that this happened to you.
Mr. CC
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.
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.
December 2nd, 2008 at 8:32 pm (#)
@ PennyScraper
Other than a low fixed rate mortgage, I’m debt free. Strange isn’t it?
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? [...]
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? [...]
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? [...]
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 [...]
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 [...]