Have you ever had a time when you were trying to pay something with your credit card and noticed that the transaction has been declined? If you are 100% sure that you did not spent over your card limit, then it is likely that your credit limit has been reduced by your credit card issuer. Since you did not receive any warnings from your credit card issuer, you may wonder if this action has violated your rights. Especially for banks and other financial institution, you often receive notice for any changes that has been make on your account.
However, things work differently for credit card as your credit card issuer is able to reduce your limit without prenotice. In other words, you will not receive any warning about your credit limit reduction unless to discover by yourself. Customers are encouraged to read the credit card agreement as it contains all policies and regulations which relate to credit limits. Normally, credit card companies do not cut your credit limit for no reason.
There are some common reasons for credit card companies cut credit limit.
It is acceptable if you forget and make the payment late for one time. However, it will consider to be a risky behavior if you constantly pay after the due date. You may seem unreliable to credit card issuers and you card limit is likely being reduced.
-Low card utilization
Even you have made your payment on time, there is still a chance your credit card limit being reduced. This may happen when you not using your card much or not using it at all.
Your credit card limit is often associate with how much income you make. If your income reduced, it is likely your credit card limit also becomes lower.