Chase - Credit Limits being Reduced due to spending below available limit

[Kem]

PSA - 820+ credit score here, use my Credit Cards for budgeted expenses and pay in full every 2 weeks to reap the rewards. 

Received a letter from Chase dated 2020.06.05 that is cutting my limits on my cards with them by 50% each because "we saw you spent below your available credit limit in the last 12 months"

[K_in_the_kitchen]

We've had them do the same before, but honestly the limit was ridiculously high and we weren't even using the card.  Current FICO score is 840.

Does paying in full every two months mean you pay interest, or are you using a hack I've never heard of?  We pay in full monthly, using both a Costco Visa and an Amex.

[martyconlonontherun]

I think Chase typically limits combined credit to under 50% of salary across cards, which can be ridiculously high. What can you put on credit for $25k?

I churn so have like 6 cards and always initially get approved for a high credit limit and then ask them to lower it. I'm sure if you wanted more credit on one card, you just message them and ask to first lower it on the Southwest card(?) and then ask if if can be applied to the CSR (?).

They only care about bust out risk, IMO. If you traditionally spending low and then suddenly use all your credit limit it would be a concern. They are pre-emptively doing it in a weak environment.

[Kem]

Typo, we pay in full every 2 weeks, not every 2 months.  Why – the cashflows work out a bit easier in the overall budget.

Agreed, the limits were & are still excessively high. 

I fully understand this is a preemptive move in a weak environment.

In no way am I upset, I was curious when this would start happening given the overall economic perceptions.

[K_in_the_kitchen]

Typo, we pay in full every 2 weeks, not every 2 months.  Why – the cashflows work out a bit easier in the overall budget.

Thank's for clarifying, that make more sense.  I typically set the accounts up to pay the full statement balance automatically each month so I don't have to think about it, although while we were first getting used to YNAB I would manually pay so I could pay all of one month's charges during the first week of the next month.  I finally realized the way we budget makes that unnecessary since we budget each month with the income from the month before -- for example June's budget uses May's income.

[Kem]

I too budget a month ahead - so the checking account always has a 1 month cash buffer

Automating Credit Card payments is awesome.  Except for the 1 time a large fraudulent charge inexplicably clears without your knowledge and with no alerts and the auto payment bounces.  That payment then goes through and the next day the mortgage payment bounces.  Ask me how I know. 

Now I take 15 minutes 2x month to confirm all the charges are expected and drop a payment.

[kanga1622]

Guess we will get by for a year. Put the HVAC replacement on a card to get the reward points and paid it off before any interest. So one month in the last year we had a nice high balance. :) But most of the time our balance is less than 10% of the limit.

I suppose they are worried about more people losing jobs and defaulting on payments. Best to reduce their risk across the board.

[Cadman]

I opened a new Chase card last week and had the same experience- low spend cap, and a letter included with the same language as Kem's. One phone call to Chase and they were able to redistribute the (ridiculously high) limit from one card and spread it to the others without the impact of a credit check. Easy-Peasy.