Tips Reduce a Credit Card Limit
Author: Doug
Posted: Mon Jun 09, 2003 4:12 am
Post subject: Tips Reduce a Credit Card Limit
Board Monitor, I have an authorized credit limit of over $22,000 on an MBNA card and I fear that it may keep going up. The balance I owe is zero. I don't feel that I need such a high authorized limit, but I am concerned that if I request a reduction that either MBNA and/or the Credit agencies, i.e. Equifax, Transunion, (I forgot the other one), will see that as a negative. Do you have an opinion? Thanks.
Doug
(Yes, the same Doug of a few months ago)
BTW, I am curious. How much of a cash back, in American Cash Greenbacks called dollars (remember those?), did you get by buying that minvan on your credit card?
Author: Eugene
Posted: Mon Jun 09, 2003 4:26 am
Post subject: Tips Reduce a Credit Card Limit
Doug, why are you afraid the limit will keep going up?
Unless you get a direct indication from credit industry that this credit limit is too high for you (for example, if you are going to take out a mortgage and the banker tells you your credit limits are too high, or if "too much available credit" is one of your most important reasons why your score is not higher), I would NOT ask to reduce this credit line. You are very likely to do more hard than good to your score.
If you do not want this credit line to increase further (I don't see why), you can ask MBNA to stop increasing it automatically. At least that's better than reducing it.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Doug
Posted: Mon Jun 09, 2003 4:39 am
Post subject: Tips Reduce a Credit Card Limit
Thanks Eugene, that is what I concluded also, but wanted some other peoples' opinions to reinforce my thinking. What I was concerned about was losing my card or having it stolen. And if I didn't notice it being gone immediately, that some thieve might run up a big bill. Of course I know that I have 30 days grace to report the loss or thief, and if I did so my liability would be only $50. But I absolutely hate thieves. And I wouldn't want even the credit card companies to be ripped off (although they are doing the same thing legally in many instances, but that is another story we don't have to go into over and over). Anyway, thanks for your opinion Eugene.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Eugene
Posted: Mon Jun 09, 2003 10:22 pm
Post subject: Tips Reduce a Credit Card Limit
Although federal law places cardholder liability cap at $50 if you report a card loss soon, all three major card networks (Visa, Mastercard, AmEx for sure, not sure about Discover) have rules that protect the cardholder 100%. You are never liable for any unauthorised purchases period.
So, if MBNA has no problem giving you $22,000 that they know they might lose if you lose the card, why should you have a problem with that?
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Posted: Mon Jun 09, 2003 4:12 am
Post subject: Tips Reduce a Credit Card Limit
Board Monitor, I have an authorized credit limit of over $22,000 on an MBNA card and I fear that it may keep going up. The balance I owe is zero. I don't feel that I need such a high authorized limit, but I am concerned that if I request a reduction that either MBNA and/or the Credit agencies, i.e. Equifax, Transunion, (I forgot the other one), will see that as a negative. Do you have an opinion? Thanks.
Doug
(Yes, the same Doug of a few months ago)
BTW, I am curious. How much of a cash back, in American Cash Greenbacks called dollars (remember those?), did you get by buying that minvan on your credit card?
Author: Eugene
Posted: Mon Jun 09, 2003 4:26 am
Post subject: Tips Reduce a Credit Card Limit
Doug, why are you afraid the limit will keep going up?
Unless you get a direct indication from credit industry that this credit limit is too high for you (for example, if you are going to take out a mortgage and the banker tells you your credit limits are too high, or if "too much available credit" is one of your most important reasons why your score is not higher), I would NOT ask to reduce this credit line. You are very likely to do more hard than good to your score.
If you do not want this credit line to increase further (I don't see why), you can ask MBNA to stop increasing it automatically. At least that's better than reducing it.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Doug
Posted: Mon Jun 09, 2003 4:39 am
Post subject: Tips Reduce a Credit Card Limit
Thanks Eugene, that is what I concluded also, but wanted some other peoples' opinions to reinforce my thinking. What I was concerned about was losing my card or having it stolen. And if I didn't notice it being gone immediately, that some thieve might run up a big bill. Of course I know that I have 30 days grace to report the loss or thief, and if I did so my liability would be only $50. But I absolutely hate thieves. And I wouldn't want even the credit card companies to be ripped off (although they are doing the same thing legally in many instances, but that is another story we don't have to go into over and over). Anyway, thanks for your opinion Eugene.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Eugene
Posted: Mon Jun 09, 2003 10:22 pm
Post subject: Tips Reduce a Credit Card Limit
Although federal law places cardholder liability cap at $50 if you report a card loss soon, all three major card networks (Visa, Mastercard, AmEx for sure, not sure about Discover) have rules that protect the cardholder 100%. You are never liable for any unauthorised purchases period.
So, if MBNA has no problem giving you $22,000 that they know they might lose if you lose the card, why should you have a problem with that?
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
posted by CardRatings.com at 1:54 PM
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