My husband and I have worked hard to have great credit. We pay on time, pay more than the minimum and sometimes just pay off the card at once. As a benefit, all of our credit card companies have given us generous credit limits. In December of 2020, the credit union that we have one of our cars with messed up our payment and reported it being late to the Big Three (Transition, Equifax and Experian). Discover card somehow found out and immediately lowered our credit limit. I only found this out when I used the card and it was declined. Our credit union fixed their mistake and the ding was taken off our report. I called Discover and explained that it wasn’t our fault, but they refused to reinstate our credit line. We feel punished by Discover. I can understand if we had been late, missed payments or something like that with them. In fact, all the other credit card companies added to our credit limits when I called and told them what happened. Has this ever happened to anyone else. I know this was a lot of information, but I hope it will help somebody else in the future.
Bummer. That happened to me, not a wronged report, but a lowering of credit on a couple of cards. I also read that this happened a lot during this past year because banks didn’t want to be on the hock for a lot of unsecured debt (pandemic), so they got stingy.
Thanks for sharing your experience.
Jamie: Please don’t take this the wrong way, but I am only trying to point out a an erroneous comment that many people make regarding the benefit of having a good credit rating - the companies have given you great credit limits! While this may seem like they are doing you a favor, the more credit that they give you that you do not pay off immediately, the more money the company makes! I am not sure they are doing anyone a favor when their main motivation is simply to make more money. The fact that you have a good credit rating is only an indication of the risk they see that you may not pay off your debt. You will likely pay it back with the very high interest payments. Great for them! Less great for you.
Early on in the pandemic, American Express also lowered my credit limit. Initially, I was surprised but it also encouraged me to not spend so much.
@Phil H.
I look at the credit line increase a little differently. With the added increase it’s easier for me to stay below the 30% ratio that credit card companies hold against you. You just have to be disciplined enough to not fall in the trap of spending more because of that increase.
@lynn.galvin posted:
@Phil H.
I look at the credit line increase a little differently. With the added increase it’s easier for me to stay below the 30% ratio that credit card companies hold against you. You just have to be disciplined enough to not fall in the trap of spending more because of that increase.
That might be the lesser of 2 evils, but with an emphasis on the concept that both are still evils. Living within and below you means generally dictates not relying on any form of credit to get by on an ongoing basis. Home mortgages and business loans where the basic purpose of the loan is to help you make more money are 2 exceptions.
@LynnGalvin, that was my thinking too.
