Credit card limit lowered

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After searching the forums I found a lot of information, impacts and thoughts about increasing and decreasing your credit limits on your credit cards. 

I have a little different situation I was hoping to get the groups thoughts on.  I have a Capital One credit card that had a limit of $30,000 which was lowered to $10,000 last week.  I called in and they said it was because I did not utilize enough of my credit limit but had nothing to do with any changes in my credit that the representative could see.  In fairness to them (probably the computer program that did it) I typically charge about $600 per month on the card.  I have had, however, three months in the last year where I have charged more than $1,500 and it is always paid off in full.  I am a little worried now that I go over 10% of this cards limit a few times a year and it could negatively impact my credit score.  Is this a valid concern?  I also have a separate card with a $20,000 limit but the capital one is my primary card as I like the rewards the best.  I also don't want to go through a credit check to raise a limit when I am not sure I need the space any longer.

[Heroes821]

Well if you pay it off every month in full the impact to your credit score is zero because only a balance held past the month mark will show up as utilized credit.

[Another Reader]

It shows up as credit utilized if the statement closes with a balance, even if you pay it off the next day.

Capital One is fairly stingy with credit limits and better rewards can be had elsewhere.  Suggest you check out some of the Chase and Bank of America cards.  If your investments are with Fidelity, they have a great 2 percent cash back card through Elan.  Take advantage of the sign up bonuses and put the Capital One card in the drawer for awhile.

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Thanks Another Reader.  I will take a look at some different cards.  I do get a full 2% on travel with the capital one so it is a nice benefit.  I would much rather get the cash if it were 2% though. 

I also received the letter from Capital One explaining the lowering of the limit today.  I paid off my house last June as it was the end of a 15 year mortgage.  This was cited in the letter under the "lack of recent installment loan information."  So even with an 806 credit score, I am less credit worthy than when I had a house payment.  I will go ahead and stay debt free but I  find it interesting that paying off my home and having that extra $1,000 per month makes me less credit worthy.

[Zamboni]

Meh, you don't really need to do business with them . . . their loss.