There are several reasons that your credit card issuer decreases your credit limit. Many new users find it has been hard to apply for credit during COVID-19 pandemic. At the meantime, some existing customers also find their credit card limits have been lowered by their credit card issuers. Major reason for credit card issuers decreased their limit for borrowers is when they feel less confident about the pay back ability of their borrowers.
We all know that having too many credit cards under your name is not a good idea, and what are the key factors when credit card issuers determine limit for each customer at the first place? In fact, the card limit you have usually link to how much income you make, your credit score, and other financial record. As a result, your credit limits are likely to change if your financial status has changed. Another reason for credit card limit to decrease is when customers constantly not paying their bill on time.
What should you do if you find out your credit card limit has been reduced? The first thing you should do is not to panic and call your card issuer to ask the reason why your limit has been reduced. If you believe you have done nothing wrong, provide proof of your financial statement and payment history to request a reevaluate. If the plan is not working and your limit still being cut, you might have to accept the new limit. Then, you need to make sure to make your monthly payment on time and your limit will increase automatically. Some experts also suggest only spend 30% of your total credit limit can improve your credit score significantly which could possibly increase your credit limit as well.