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Credit Limits Lowered

The last post in this topic was posted 2410 days ago. 

 

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Just received letters from Chase lowering credit limits on the two cards I have with them. First one had a CL of $11K with a balance of 6K on it. Second had a CL of 17K with a balance of 11K on it. They lowered the first CL to 7K and the second to 12K because "balance owed on revolving accounts too high; balance too high compared to credit limit; number of accounts currently in use".

 

Excellent credit for 15+ years. Never late; never missed a payment. Been paying just over the minimum; however, recent windfall will allow me to make some major dents into these and the other cards I have.

 

My question(s):

How do I best proceed now? Call Chase and ask for increase based on good payment history/credit?

And I have approx. 13K from the windfall that I can apply to debt. Do I pay off the 6K one and pay the rest to the 11K one? Or pay off the 6K, pay off another bank card of 4K, then use the remaining on the second Chase account?

 

Do I just want to get rid of Chase soon as possible and then close them both?

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Sorry this is happening to you. I know you know the answer to your own question as to what triggered Chase to balance chase. I think its just something you have to be patient with.

 

I know BC can happen with any bank but, Chase has been rather aggresive with it lately.

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I have done more reading up on balance chasing. My concern is if I use my 13K to pay off some cards in full or make large payments to a few cards, then all my accounts might get into this balance chasing thing. So my follow up question is this:

 

Would it be smartest to pay the amount each statement shows where it says "pay this amount to pay off account in 3 years" to every card I have? Would they see that and think I'm working toward getting the balances all paid off in three years and be less likely to balance chase me? Does paying that 3 year amount have any effect on credit score?

Edited by tigerlily

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IMO you want to pay the known/reputed balance chasers off last, if your goal is preserving your limits.

 

One of Chase's stated reasons for balance chasing was the number of cards that have a balance. Making that condition go away should reduce the chances of them balance chasing you as you pay down the balance on the Chase cards. Get the other cards down to zero and make sure they report that way before making big dents in your Chase balances.

 

I would also try to figure out if there is a pattern as to when/how often Chase is softing you. You might want to make sure that they have softed you and found fewer cards with balances before tackling the Chase balances (keep paying at least the minimum of course).

Edited by cv91915

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Be very careful ... Because if you make another payment, they might chase it to your new lower balance... This happened to me with Amex and BOA a few years ago... For a few months, every time I paid a bit more to lower my balance, they would just lower my limit.. And like you, I had never been late with them or any other of my creditors.

 

When I noticed that, I started paying enough to lower my balance by only a few hundred ... Once I saw them stop balance chasing me, I then paid down my balances....

 

BTW, They didn't stop until they had my limits to less then 50% of where they were... BOA took my down to a 1/3 of my original credit limit... And if this account wasn't so old, I would have dropped them... What's funny now, since a few years have past, both companies have started sending me pre-approval offers again..

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Thanks for all your suggestions. I think I have it narrowed down to either just paying off the lower balance Chase card and putting the rest toward the higher balanced one til it's paid off. If they balance chase me on the second one, then I'll just have to take the hit until it's all paid off. Or the other option is to do a sort of combination of crabjoe and cv91915's replies. Take some big bites out of my non-Chase accounts while paying maybe an extra hundred a month to each of the Chase ones and hope they don't balance chase any further. I am just worried about the other cards jumping onto the balance chase bandwagon; but from what I've seen researching around online, Chase seems to be known for balance chasing when they get antsy. Should have guessed from their name, right?

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Thanks for all your suggestions. I think I have it narrowed down to either just paying off the lower balance Chase card and putting the rest toward the higher balanced one til it's paid off. If they balance chase me on the second one, then I'll just have to take the hit until it's all paid off. Or the other option is to do a sort of combination of crabjoe and cv91915's replies. Take some big bites out of my non-Chase accounts while paying maybe an extra hundred a month to each of the Chase ones and hope they don't balance chase any further. I am just worried about the other cards jumping onto the balance chase bandwagon; but from what I've seen researching around online, Chase seems to be known for balance chasing when they get antsy. Should have guessed from their name, right?

Good luck on this!

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Make an effort to have less than 50% of 1. all accounts and 2. all revolving TLs reporting any balance

and let any balance that is reporting be <50%, then <30%, then <10% of CL, etc until paid off.

 

Consider paying down highest APR balances first to decrease the cost of the debt, since a primary focus must be paying the debt as inexpensively as possible, can always get limits restored down the road.

 

Once total debt and number of accounts with balances decreases AA target is more likely to be lifted.

Expensive debt not only costs more, it can also prolong AA because it takes longer to pay back.

 

Even though a balance chase takes a hit on scores-by far the best way to make it stop is to eradicate debt swiftly, not spoon feeding small payments in an effort to stave off the next scheduled CLD. The hit from a chase is a temporary effect, keep moving forward as indicated the timing is good since now have more cash to reduce debt, will soon drop off their AA radar.

Edited by virtualtreasure

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Call the Chase backdoor and speak directly with an analyst. Explain your concern about balance chasing and ask if you can remedy without being BC into the ground. Agree with all about getting all balances down, but the problem with paying chase off last is that the UTIL will be killing your scores in the meantime. If you're planning on moving on from chase if you can't sweet talk underwriting, I would cut my losses and try to optimize fico's for other apps.

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Make an effort to have less than 50% of 1. all accounts and 2. all revolving TLs reporting any balance

and let any balance that is reporting be <50%, then <30%, then <10% of CL, etc until paid off.

 

Consider paying down highest APR balances first to decrease the cost of the debt, since a primary focus must be paying the debt as inexpensively as possible, can always get limits restored down the road.

 

Once total debt and number of accounts with balances decreases AA target is more likely to be lifted.

Expensive debt not only costs more, it can also prolong AA because it takes longer to pay back.

 

Even though a balance chase takes a hit on scores-by far the best way to make it stop is to eradicate debt swiftly, not spoon feeding small payments in an effort to stave off the next scheduled CLD. The hit from a chase is a temporary effect, keep moving forward as indicated the timing is good since now have more cash to reduce debt, will soon drop off their AA radar.

 

That sounds like sound advice.

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calling may simply add fuel to the fire, it seems unlikely to elicit any particularly new/helpful info at this point.

Edited by virtualtreasure

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This is crazy. Isnt the ideal CC candidate someone with a high limit that isnt afraid to use it...and isnt worried about carrying a balance...and always makes more than the minimum payment but doesnt PIF? Seems like the issuers make the most profit on these indiviuals. There must be another set of criteria at play for them to reduce CLs like this...some additional profiling that makes an individual a risk...even with perfect payment history. Job changes, deposit history with the bank on other accounts, buying a home, buying a car, retirement, reduced income, divorce,........ Must be some set of things that can trigger. I cannot imagine that this is a common practice...even though it feels like it from reading here. I wonder what the forula is because it seems unlikely to me that they would target their prime customers...i.e. those I noted above..

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This is crazy. Isnt the ideal CC candidate someone with a high limit that isnt afraid to use it...and isnt worried about carrying a balance...and always makes more than the minimum payment but doesnt PIF? Seems like the issuers make the most profit on these indiviuals.

I don't think credit card companies like those people anymore. I remember reading that after the economy crash issuers were slashing limits of people who had high balances and weren't paying enough towards them. I reckon that since they lost so much money on people defaulting on debt before, they aren't willing to risk it happening again by not cutting their risk as the debt is paid off.

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This is crazy. Isnt the ideal CC candidate someone with a high limit that isnt afraid to use it...and isnt worried about carrying a balance...and always makes more than the minimum payment but doesnt PIF? Seems like the issuers make the most profit on these indiviuals.

I don't think credit card companies like those people anymore. I remember reading that after the economy crash issuers were slashing limits of people who had high balances and weren't paying enough towards them. I reckon that since they lost so much money on people defaulting on debt before, they aren't willing to risk it happening again by not cutting their risk as the debt is paid off.

 

I think you hit the nail on the head... When Amex started balance chasing me, my balance was usually around 50% of my limit .. +/- 5%. Been like that for a while. My limit was over $20K.... Even though I was making 4-6X the minimum payment, I guess that wasn't good enough because I kept using the card... The worst was that once Amex hit me, others started to follow, because it changed my credit profile... I think my over all UTI was around 30% before the balance chasing.. But once both Amex and BOA got into the mix, it was aound 90%...

 

It now seems, at least for me, things are getting back to normal... I'm getting credit offers again, from the past balance chasers, and was even able to get a PenFed card...

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BBRZ is doing the balance chasing bit to me.

 

Perfect credit, all scores in mid 700s....util now to 29% , down from 70% 2 years ago....no baddies, only 3 Inqs, all good

 

I think it's a Crap One thing.....I started at $3500 CL, went down to $3100 CL, then 2 months ago, $2905 CL.....

 

Everyone else, even TARGET, for goodness sake, has raised my CL in the last year. NFCU is giving me CL increases I almost don't believe....

But BBRZ is still on the downward spiral......if Citi doesn't reverse when they take over BBRZ, it will be history.

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Old thread, but most recent I've seen on this. My credit is currently BAD (was very good, then downturn, underemployment, two job losses...and a boss that didn't pay Wages leading to a labor judgment for a significant amount of money that I can't collect on... yada yada.) I am back on my feet, and my big concern now is decreasing that overall limit as I pay down the creditors. Anyone got recent tales of this event? My chase card's the one around 25%... the other two are at 1.9 (an old card I cancelled when they raised the rates but have been paying minimums on) and 0.0 (pre-charge off negotiation resulting from the above nonsense), so my goal would be to pay chase first... but as I said, I'm afraid of any resulting limit decrease.

 

Thanks to all for any input or recent knowledge on this front.

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