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Credit card companies can cut limit: How to not let it hurt your credit score

By Jason Stoogenke, wsoctv.com
By Jason Stoogenke, wsoctv.com

CHARLOTTE — Credit card holders who pay off their balances or cut their limits could negatively impact credit scores, according to Action 9 reporter Jason Stoogenke.

Ted Rossman, of CreditCards.com, said he’s read reports that those things have happened recently to 60% of cardholders across the U.S.

“So, you picture, like, somebody who may be owed $3,000 and they had a $10,000 limit,” Rossman said. “That’s actually a 30% ratio. That’s pretty good. However, if you get your limit cut from $10,000 to $5,000 and you owe that same three grand, now you have a 60% utilization. That’s a lot higher. That’s going to drag down your score.”

Leslie Bolick said she didn’t spend a lot on her Capital One credit card.

“Well, that should be a great thing,” she told Stoogenke.

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Bolick said the company dropped her credit limit from $5,000 to $1,500.

She worried about how it would affect her credit score.

“It was a slap in the face. Why work so hard? We’ve worked so hard to have good credit and be very frugal,” she said. “I don’t know. I don’t get it. I don’t see why we are being punished.”

Stoogenke asked Capital One for its response Tuesday. He had not gotten a response by 2 p.m. Friday.

No matter what company you use, ask a customer service representative to put your limit back to where it was.

If that doesn’t work:

  • Credit card users should spend less on that card. They should also use other cards more and try to make sure you don’t use more than 30% of a card’s limit.
  • Make an extra payment in the middle of the payment cycle so your statement is lower.
  • Think about raising your limit on your other cards but be careful. Ask if they do a hard credit check first because it could affect your credit. So, ask for a soft check.

These methods do not mean that customers should spend more money or use up more credit.

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