Comments on: Bad Money Decision Confession Time #5

By: Mandi

Mandi — Thu, 05 Oct 2006 21:22:12 +0000

I had a card lowered from $200 to $100 a few years back and my credit report shows that I have gone over my $100 limit, up to just below $200.

I’ve also heard that closing an account brings down your credit score as well.

It might be a good idea to leave them where they are.

By: Dave

Dave — Sun, 20 Aug 2006 21:30:15 +0000

Please follow Her’s advice. Aside from utilization ratios, your high limits will show others that you’re a responsible borrower, and not a credit neophyte.

If you’re tempted, why not do something like have a trusted friend hide the cards?

By: mapgirl

mapgirl — Sun, 20 Aug 2006 14:24:02 +0000

While Her is right about the utilization ratio, unless you’re going for other credit, it’s probably better not to hang one’s self out to dry with too much available credit.

I used to call and have mine reduced so I wouldn’t max everything out in college. Glad I did it. I’ve never been turned down for credit ever, so clearly it never actually hurt me to do it.

By: Tricia

Tricia — Sat, 19 Aug 2006 21:03:43 +0000

Her – Thanks for stopping by and thanks for stressing the point of debt utlization ratio. I do plan on leaving the credit limits as is until all of our credit card debt is paid off. Once it is, I will lower the limits because if I keep the balances at zero the limit will not matter. It will stay at 0% utilization and there should be no affect on my credit score.

At least that’s what I’m thinking. If anyone knows different – please let me know…

By: Her

Her — Sat, 19 Aug 2006 20:43:29 +0000

Don’t ask them to lower your credit limits, unless you really think it’s too tempting. Lowering your credit limit will increase your debt-to-credit ratio and lower your credit score. Besides, the higher credit limits can be helpful if you’re manipulating your debt, i.e. by transferring all your debt from high interest cards onto one low rate card.