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Chase Bank Lowers My Credit Limit As I Make Payments Each Month. – Josh

Josh

“Dear Steve,

Chase Credit Cards are cutting my limits as I pay off the card saying the same thing each time.

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So, Chase has been cutting my limits despite me having a solid 720+ credit rating. Seems like every time I send in $500 they cut my limit proportionately. They claim my balance has grown too much in each letter, always saying the same thing. However, I’ve done nothing but pay down my debts. Is using the same excuse to cut my limits legal?

Josh”

Dear Josh,

They could cut your credit limit because they say you have toe cheese. The reason why is not important. They cut it becuase they can.

I think that since you get the same letter each month your balance is just above an amount they want to see it at and the reduction and letter happens automatically.

It’s not personal, it’s not you, it’s just Chase saying they don’t value your business or you anymore.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

10 Comments

  • My question is that if Chase lowers the limit without looking, then wants to pull your credit rating, is it worth it to face their scrutiny or leave it alone? I know my limit inrease request(more like restoration to former limit) will be denied, so why have an inquiry on there unless I’m sure? Isn’t dumping them bad also? I have no debt but want to maintain good credit and they decreased me to $ 500 for not using it. Semms like I lose either way.

      • The limit was $2000.00 reduced to $500.00, no balance on it, never carried one in the past. I’m thinking I’ll just continue to use American Express, also no balance, and leave it alone.

        • I don’t see any advantage in pushing the limit back up other than possibly improving your overall debt to credit ratio if you are carrying balances on other cards. If you want to keep the card open and take advantage of your credit history length on that card you should use it from time to time and you can pay the balance off monthly.

          It’s wise to keep it open. Any creditor can close any card, at any time, for any reason.

          Steve

  • My Chase card has been completely paid off to $0 due for 6 months and in 12 years has never been late or in default. My reward? they dropped my credit limit from $9000 to $500. If that’s the treatment you get for following the rules and paying on time then I can live without Chase Bank.

    I won’t trust an Institution that while barely paying its own bills punishes those who do.

    • I feel your pain. I have ALWAYS paid my Chase mortgage as well as credit card on time. Proudly got to pay it off last month. It was a 2800.00 limit, and we had it right up to 2700. Paid it off, and with ZERO notification they dropped it to 500.00 limit! NICE! I closed the account. Screw them.

  • Chase has messed with me and my credit score at just the time I want to purchase a house. They lowered my limit after I paid off most of my balance. I’ll never do business them again.

  • I would like to know Steve’s credentials. He gave such a fantastic explanation as to why the credit limit was lowered. But on a serious note, Chase is cutting limits across the board. They need to do this in order to limit their exposure to any credit risk, thus, they can keep less money in reserves for potential losses. I personally have a 794 FICO, my brother and father are both in the mid 700’s with good thick files. No recent inqueries, no derogs, no new loans, and no closures for any of us. They lowered all of our limits. Many banks are doing this to make themselves look stronger on the books as far as leverage is concerned. I have been the banking industry for a while now, specifically in the large national bank unsecured credit card divisons. This is how it works.

  • Hi Steve,

    Paying off credit cards only to see my interest rates raised and my credit lines cut (which lowers my score) is beyond discouraging. I’m starting to think of debt settlement–not through a debt settlement company, but by talking to companies myself. What is the short- and long-term impact of debt settlement? Will it wreck my score forever, or just for a few years? So many people are in the same boat… It seems like the banks will have to be more forgiving or that the credit scoring system will have to adjust to debt settlement. What do you think? Thanks so much for the help you’re offering all of us.

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