The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Information on this website may not be current. This website may contain links to other third-party websites. Such links are only for the convenience of the reader, user or browser; we do not recommend or endorse the contents of any third-party sites. Readers of this website should contact their attorney, accountant or credit counselor to obtain advice with respect to their particular situation. No reader, user, or browser of this site should act or not act on the basis of information on this site. Always seek personal legal, financial or credit advice for your relevant jurisdiction. Only your individual attorney or advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, contributors, contributing firms, or their respective employers.
Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them. Compensation is not a factor in the substantive evaluation of any product.
In an Amazon credit card forum, a customer posted about a dilemma: The poster uses an Amazon store card to finance book purchases for school, but when it came time to buy another semester’s worth of course materials, the consumer couldn’t complete the purchase. The card’s credit limit had been lowered to $1 less than the remaining balance, leaving no room for new charges.
“I looked at my statements and the credit limit has remained the same until now. I pay more than the min. payment each month so that I can pay it off,” the cardholder wrote. “I have never missed a payment, and I rarely make purchases. What is going on and why did they lower my credit limit? Is there something I can do to raise it again? I really need my books.”
The Amazon store card is a product of Synchrony Financial (formerly GE Capital Retail Bank), and a company spokeswoman said Synchrony couldn’t comment on the specific account activity without more customer details.
“Synchrony Financial does not apply an overcharge fee when a cardholder’s credit limit is lowered below the existing balance due,” the spokeswoman wrote in an email. “Cardholders with questions or concerns regarding their account are encouraged to contact us so we may provide assistance.”
It may seem unfair that a credit card company can lower your limit without warning, but it’s not illegal. Plenty of actions require 45 days’ advance notice, thanks to the CARD Act, but changing a credit limit isn’t one of them. Such “significant changes,” as they are called in the Truth in Lending Act, include changes to your interest rate, fees or grace period.
If your limit is lowered below an existing balance, issuers are prohibited from charging an over-the-limit fee or penalty rate without giving 45 days’ notice before the limit is reduced. If that happens to you (as this customer alleges), you may want to contact an attorney or file a complaint with the Consumer Financial Protection Bureau, said Gerri Detweiler, Credit.com’s director of consumer education.
An issuer may decide to lower your credit limit for a variety of reasons.
“Credit limits are based on a number of factors and we periodically review our accounts, making adjustments to increase or decrease credit limits,” the Synchrony Financial spokeswoman said in an email.
With a lower limit, your credit score could go down if you don’t also reduce your spending, because the more you use of your available credit across all your credit cards, the lower your credit score will likely be — you can see how your credit-card spending affects your credit standing by checking your free credit score on Credit.com. You may want to contact your issuer to learn why your limit was lowered and if there’s anything you can do to increase it, Detweiler said.
Image: Alliance
April 9, 2024
Credit Cards
October 21, 2020
Credit Cards
August 3, 2020
Credit Cards