28 Jun Credit Limits Reduced
Credit card issuers continue to reduce credit limits and close accounts at an elevated rate. A recent large sample survey found that nearly a third of all Americans were affected by limit decreases or closures in the first four months of 2021: 61M people!
That reduction/closure rate is now about half of what it was at the beginning of the pandemic but is clearly still a preferred risk mitigation strategy for issuers. The three most common reasons for this are credit score downgrades, a drop in card use or recent late payments.
Of those three, card inactivity is by far the most common reason cited by issuers. This is good news for many people. In these cases, a quick call to the bank is often all that’s needed to restore your card and its’ limit. And it’s a really good idea to make that call because a card closure or limit reduction actually has a pretty serious effect on your credit score. #creditscore #creditcard #cardinactivity
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