Can a Credit Card Company Lower My Credit Limit?

Many or all of the products on this page are from partners who compensate us when you click to or take an action on their website, but this does not influence our evaluations or ratings. Our opinions are our own.

By signing up, you will receive newsletters and promotional content and agree to our Terms of Use and acknowledge the data practices in our Privacy Policy . You may unsubscribe at any time.
When can a credit card issuer reduce my credit limit?
- You use too much of your available credit: When a cardholder regularly maxes out their credit limit or carries high balances, credit card issuers may view it as a sign of financial trouble. As a result, they may cut your credit limit going forward to minimize their own risk. This is especially true if you start paying late or missing payments.
- When the card is inactive or seldom-used: The company that issued your credit card makes money only if you use the card. (That money comes from transaction fees and, if you carry a balance, interest.) If you rarely use it, the issuer may be inclined to reduce your limit and, effectively, allocate that available credit to someone else who's more likely to generate income for the issuer. If you let your card sit for too long without using it at all, your issuer might close your credit card entirely, leaving you with a potentially damaged credit score and no card to use.
- When the economy is uncertain: Credit card issuers have been known to reduce credit limits to minimize their risk when the economy is uncertain. Most issuers cut credit limits during the Great Recession, according to a survey by the Federal Reserve. They also did so in response to the COVID-19 economy.
Can credit card companies lower your credit limit without notice?
Can I avoid credit limit reduction?
Will a decreased credit limit affect my credit score?
Article sources
