Chase Cuts Credit Cards Limits for Many Cardholders
I first wrote back in April about credit card issuers reducing credit card limits for new and existing customers. Synchrony, Discover and Chase were mentioned in the article. Now Chase seems to have ramped up the practice, with many reports of lowered credit limits in the last few days. Chase has sent out letters or emails to let cardholders know that their credit card limit has been reduced. Some people might also just see a reduction in credit limit, but haven’t received an official notification yet.
Reduced Credit Limits
Chase is reducing credit limits for some customers, sometimes even as high as 50%. Letters that have been sent out state that the cardholders has spent far below the available credit limit over the last 12 months and as a result will see a reduction to the limit by a certain percentage in 30 days.
Here are some examples of these reports here and here. A reader also sent me an email saying that here credit limit was cut down by 50%, from $30K to $15K, and she has a credit score of ~800.
Reason for Reduced Limits
The pandemic and its financial impact are likely the main reason for these reductions. Millions of Americans have been taking advantage of the relief programs offered by credit card issuers, such as no interest or deferred payments for a few months. With many people unemployed right now, credit cards are a lifeline to continue making essential purchases, when there is no other income or savings.
The higher the limits on the affected card, the bigger the exposure is for the banks. Bank try to limit their credit risk. If people run up their credit card balances to the limit and then default on their debts and file for bankruptcy, banks are out of luck. In the case of a Chapter 7 bankruptcy for example, credit card companies are prevented from taking any further collection action.
Lower Limit Might Affect Your Score
When it comes to calculating your credit scores, credit utilization is one of the most important factors. That is the ratio of your outstanding credit card balances to your credit card limits. If your balance is $300 for example and your credit limit is $1,000, then your credit utilization is 30%. Anything under 30% is okay, but something closer to 1% is perfect. So if credit cards issuers are lowering credit limits, that will increase your credit utilization if you are carrying a balance.
Check If Your Credit Limits Were Decreased
Let me know if you were sent a notice from Chase about a decrease in your credit limit for a credit card. The decrease seems to have been a percentage of the total, and 50% is the highest I have seen reported, which is pretty drastic.
If you’re not sure what your credit limit was before, you can check previous statement credits in your account and compare to your current limit.
Here one for you. Today I paid my Chase card off completely, and Chase kindly cut my credit limit by 87% less then 24 hours after it was paid off. Yesterday I had a borrowing power of $6k, today, $1K!! I’ve never been late on any of my CC’s, have a 776 credit score, make $90k per year. What am I missing?!! Someone please tell me why I should continue doing business with an institution that treats an A+ borrower this way?
I just found out that Chase cut my credit line by $1000 to $500 despite me making multiple payments each month and usually paying it off nearly or completely every month to 2 months. I just got approved for PayPal credit over $2300 and Ebay of $1000 AFTER Chase’s decision to cut my credit line while using the same info on my credit report that allowed me to get 2 new lines of credit. I called and asked them to fix and they denied the reconsideration. I responded by paying off the remaing balance while on the phone with them and telling them I won’t be using their card anymore.
I just made a $2000 payment and they lowered my credit limit by $2000 as soon as the payment posted. Talk about sorry! My husband and I have a plan to reduce our debt so that we can buy a house in June. While the $2000 certainly decreases my total debt, it has absolutely no affect on my utilization rate. I received no notice whatsoever. I just happened to look at my available credit expecting it to have increased by $2000 and found that it hadn’t so I went online only to discover the corresponding $2000 cut to my limit. I have not been late on a payment ever and have a credit score of 720.
Chase cut my limit from 3500 to 700. Unbelievable
Wow that’s a big cut. Any recent change is credit score or overall debt?
Chase three months ago cut my slate card in half even tho i paid it off in full every month since i had it and just this morning i logged in to make my monthly payment sand found out they completly deactivated my freedom card that had a 10,000 limit didnt reduce it just eliminated it. I have always paid my card in full every month so this makes no sense to me when i called they said sorry sir there is nothing we can do. In a time where people are looking their jobs and they rely on the credit limits of these card they they have worked hard to get, for chase to be reducing or completly cutting then off is ridiculous. In my case I lost 12,000 in available credit for no reason. Like I said, I have always either paid them off or paid no less than half the balance every month.
No explanation at all for account closure?
During my last year in graduate school my wife got pregnant, so stopped working, and we had a baby; hence, our credit card balances went up to 90%. I graduated in June, started working in July. My income was multiplied by 8 times after graduate school (from 30k to 240k with bonuses). We gave the banks the new income information through the website (I’m not sure whether they look at this at all..). The balances had been at 92% for around three months.
With our new income, we planned to drastically reduces our balances (the credit report is perfect apart from the high balances, all payments on time and no problems). At the end of July, with my first big paystub, I made a payment of 4k to a Chase credit card with a limit of 9k. A few days after this, they reduced my limit by 3.5k. Unbelievable.
I called the reconsideration line and the representative was absolutely unhelpful. She asked me the decision came from my credit report and they considered my credit limits are too high with respect to my income (30k putting all cards together, versus 240k, seriuosly??), whether I wanted to request another credit check+reconsideration on the same terms, etc. She didn’t listen at all when I explained my income has changed and I plan to pay down my balances quickly (“you are saying you are working to reduce your balances, so reduce them and call again for reconsideration on a new credit report then”).
I can’t believe this. So now the thing is the following. As much as I want to pay off debt, I’m scared that, when I do, they will cut the limit even more. I was thinking to pay the balances of the card that was reduced as it is the most advantageous and I wanted to use it for our rent and all monthly payments (and then pay balances in full every month and don’t carry debt on that any more), but what if I pay the balances and they cut it more and can’t use it anyways.. or better yet, what if they cancel the card? what if I do this with one of my citibank cards and citi does the same?. So, after this, I’m not sure how useful are credit cards anymore. Perhaps I work on the debit card and pay those balances little by little with the money remaining from my expenses+what want to save every month. They could do this again any time, so I don’t trust my credit cards any more. What is even more humiliating is that I programmed some payments to this credit card, and if I can’t use it I have to contact those vendors with a different payment method.. I don’t know what they’ll think.
I really can’t believe this, I’m so angry. Any advice?
I just saw today chase cuts my Cradit limit my Cradit score is 800 my Cradit lint was 2000 on time payments …new limit is 500 … unbelievable.. bad company ever..
…and yet, even with a score of 800, you are unable to spell the word credit.
$3,200 limit on two different cards cut to $500 on each since December.
My wife and made a plan on how we were going to pay down are $20k credit card debt. I picked the highest interest card to pay down first which is are citi bank card. Our credit limit was $6700 with a balance of $6200. I made a $5000 payment and 2 days later I receive a notice that my new credit limit is $1250. $50 dollars over the current balance. My credit score was lowered when it should of been raised since I lowered my credit to debt ratio by 25%. My wife is unemployed and my salary was cut 20% due to covid. This is bullshit for Citi bank to do this to a customer with excellent payment record and also cut there balance down to 20%. . I was cut 75% of my credit limit. I dont even know who to talk to. That money was everything to us. Jason
Received my letter today. Cut 40%! Sad that they do this to people have been with them 25+ years and who have 839 credit score and PIF every month. We are the ones they should continue business with. We use less than 1% of our total credit each month. I don’t particularly care about the card, but I do care about our credit score! I hope this does not affect lower our credit scores. Makes no sense that they go after cardholders that keep their agreement and pay their bills!
I got a notice today that Chase was cutting my credit limit from $13,000 to $6500, due to “spending far below my available credit”. This is my secondary card, so I don’t use it on a regular basis or for large purchases, but I Do use it monthly to keep it active and generally charge $200-300 a month, some of that for monthly subscriptions. Balance paid in full every month via autopay. I have had this card for 29 years, and my credit score, according to Chase’s own “check your score” is 840. Have NEVER had a late payment or even carried a balance. I could understand it if I regularly had high balances or a lower credit score or anything in my profile that would show potential risk of running up my credit and then declaring bankruptcy. I signed into my account and saw 3 messages or “alerts” I hadn’t seen. I clicked them on, and all three were messages offering me more credit offers or platinum cards from Chase. Bizarre. This won’t affect me as far as ever needing to use that credit limit, but it will “ding” me slightly on my credit rating as far as utilization rate. My primary card is Capital One. We’ve had that one for 20:years. Use it for everything and pay balance every month. Our limit on that one is $33,000. We need that limit because we travel (before Covid) and spend heavily at times on NFL tickets. Again, balance always paid in full. Please help me understand this. As a matter of principle, it bothers me.
While Chase is limiting their exposure as noted above, they’re also trying to make more money. Having a high credit score to them really means nothing if you keep paying your bill in full (as you should). You’re not paying them interest, so they can afford to cut your CL, which still covers what you usually spend.
Now I know why I don’t have any CHASE cards!!! What a crappy way to treat your customers. Go CITI and AX. My wife and I gave 8 accounts between them. Never a CLD. Are you listening CHASE.? Probably not because you only care about your private clients!