Victim: “What changes are you referring to may I ask?”

CC Company: “We want to let you know that without your prior knowledge or any recourse on your behalf that we are lowering your credit limit by thousands of dollars”

Victim: “What does this mean to me?”

CC Company: “It means that we looked at your credit report without your knowledge (a soft inquiry- the only good thing about this conversation) and we feel that based on the knowledge we have obtained that your credit limit should not be the dollar amount we just raised you to two months ago anymore and that you now only deserve a limit just above the amount that you have on your card right now”

Victim: “This is crazy. Do I have any options?”

CC Company: “Yes you have two. 1) You can make a payment of (basically your entire balance) and we’ll raise it back up to the amount you had it at. 2) You can fax us proof that you have the amount of income you have right now and we will further investigate, but leave your limit at what we have lowered it to throughout our investigation”

Victim: “But I have never missed a payment, I have never been late, I have done everything you have asked me month in and month out. Why are you doing this to me?”

CC Company: “Would you like me to read the reasons to you?”

Victim: “Yes, most certainly”

CC Company: They will read from a script verbatim and you will feel like you are listening to one of the worst audio cd’s you have ever heard in your life…”Does that help explain things?”

Victim: “I have no clue what any of that information means”

CC Company: (Without saying it) “Neither do we, but we do know how to read from a script”

Sadly enough this  is pretty much the way a call like this will go if they are lowering your credit limit. What they fail to tell you is the impact it will have on your utilization ratio; which is one of (if not the) most important things when it comes to your credit score. Your utilization ratio will make or break your FICO score, but they don’t mention any of that to you.

Until now I have stayed away from attacking credit card companies for their antics, but that is now history. I am now going to call it like it is, that’s right a spade is now a spade. No more sugar coating things, the truth will set us all free from being slaves of debt (which is what credit cards want) and they are willing to pull sneaky things like lowering your credit limit that have a detrimental affect to you as well as your credit report  in the long run.

Your best option in my opinion if it is one to you is for you to transfer the balance off of that card to another card and leave that card open. DO NOT CLOSE THE ACCOUNT! That will hurt your score too. Length of credit is very important to your credit score also (I found this bit of information out the hard way and is actually one of the main reasons that Cred Edge exists today).

Back to the topic…If you are not able to transfer the balance off of the card to another card, then unfortunately until someone starts to work for the people, the only thing you can do is to take it…How sad is that really? Very sad to be all the way honest. For us a population to allow these things to happen is even sadder. We need to take a stand if by doing nothing else by spreading this information around. Spread any knowledge have and educate yourself on the credit card industry. If you are anything like me you will be shocked at what you will find.

Below I have provided a list of things that you can do as a recourse (provided by smartbalancetransfers.com) I will be upfront with you they are honestly not very intriguing option, but they are the only options we have nonetheless. I hope you find them helpful.

What You Can Do When Your Credit Limit is Decreased

1. Act Quickly When you learn of a credit limit cut, especially one that puts you at or near your credit limit, you need to move very quickly or you risk falling prey to numerous traps.  Here’s one example:  Let’s say your limit gets cut to $100 more than your current balance, and you have an auto-payment set up for $101.  When that goes through, you’ll not only go over your limit (and get hit with a fee) but also, you will have given the credit card company a legal and legitimate reason to raise your interest rate. 

If you fall into this position, make a payment to your credit card online or by phone immediately and cancel any auto pays you have in place.

2.  Apply for a New Credit Card:  It takes a few weeks for changes by your credit card to hit your credit report.  If you apply for a new credit card immediately, you may be able to get approved before your credit score decreases.  This will not only give you access to credit, but it could also help your credit score, as you will now have more credit available to you (For information or to apply for a new credit card, you can compare offers in 0% APR credit card section of this website.)

3. Pay Down Your Credit Card Debt:  While obviously easier said than done, paying down you debt will help limit the damage done to your credit score.  However, there are a few things to be careful of.  For example, if you think you will need this money in the near term, you’re better off holding on to it and worrying about your credit score later. 

4.  Monitor Your Credit Closely:  If you’ve recently been clobbered with a credit limit decrease or another adverse credit event, you may want to check out your credit score.  There are a number of websites that offer free credit monitoring trials for 30 days that provide you with access to all three of your credit reports and scores.  These sites also have tools that enable you to estimate how certain events, such as getting a new credit card, will change your credit score.

For more information on utilizatoin ratios please inquire directly with me via email. I have a plethora of information on the topic that may help you better understand.

https://www.registrationfactory.com/v3/default.cfm?EventUUID=5014827E

Thanks!

We want the Cred Edge experience to be long lasting and continously prosperous. There is a wealth of knowledge that we provide and we don’t expect everyone to be able to write down or remember everything when we  present it, so we use our blog as a way to follow up with students as well as give them the opportunity to share their story of how we impacted their lives. This is a place for people to tell the good news about them and what their successes have brought to them. There is plenty of good news to share, and we hope that we get to hear all of it.

We have created an online environment that is safe and educational for all that share it with us. We have an environment that allows people to be free and understanding of others needs. Cred Edge is dedicated to a healthy lifestyle for all people that is financially stress-free and abundant. All people have the right to live that type of lifestyle and it is our mission to help people do so.

We understand the financial pitfalls that people face with credits and we want to do all that we can to help people understand them so they can overcome them. There are many techniques that can be used to build and maintain credit, but without the knowledge of what those techniques are we set ourselves up to have to learn along the way and the credit industry is not set up for that. It is our job to understand the workings of credit before we use credit cards and take out loans. No one was there for us when we were going through it, and this is our way of rectifying the situation. Ignorance of credit cause hardships can put you on the lonely road leading right to bankruptcy.

The knowledge we provide to students is long lasting and essencial to long term financial success. Without a working knowledge of finances playing a game all your life, but never really knowing what the actual rules are. The credit industry is no game and some will argue these rules aren’t fair. We are not here to play one side of the fence or the other. We exsist simply to educate on what can be done to make the best out of the situation we are facing.  Students need to be aware of what the burden of debt can lead to. We are doing our best to raise that awareness so future generations can focus on prosperity and take the high road to financial freedom.

How about actually spending money? Credit is the opposite and should be used sparingly.  It should be looked at as temporary loan, and not a way of living outside of your means. It is easy to fall into a way of life that is outside of your means, however, and we understand that. It is a common trend amoungst college students to use credit to buy things they may not actually need,  and things that they know they will not be able to pay for any time soon. If that happens is can result in an snowball effect that could lead to bad debt, which leads to frustration, which leads to stress. None of these things are productive to a college students goals, and none of them will help any other aspects of a persons live.

The good thing is that Cred Edge understands that in each negative there is a seed to a better positive. We use that theory to help people better themselves, no matter what their current financial situation looks like. Sometimes you have to fall all the way to the bottom before you can set your feet to climb back to the top. We would rather you stay at the top and use us to hold you up, but we understand that will only happen in a perfect world. In reality, we are here to pull the students back up that happen to slip.

A little more about what the purpose of our visit consists of…

Cred Edge specializes in the education of high school students on the responsible use of credit and loans. We believe that if people were educated earlier on in their lives on how to manage their finances we wouldn’t be dealing with the credit crises that we are now.

 We began because declining incomes, growing debt, and high cost education are combining to make this the first time in the history a generation is NOT on track to surpass the living standards of their parents-This being our generation we take personal offense to that fact and starting this organization is what we have done to help combat it.

 We accomplish our goals by providing students with real world experiences, expert financial advise, and on-going support. We provide students with the tools they need to be confident in their ability to responsibly manage their finances.

There are so many things to do on a daily basis for a person to stay on track with life goals, that sometimes the task becomes a daunting one. We understand this which is why se help students set goals and provide them a path to obtain those goals.  We will also continue to follow up with those students to help keep them on track. 

We want a more educated society when it comes to credit topics. We want to make sure that after graduation all students are appropriately aware of the financial challenges they will face when they depart high school and living at home  and head into the hustle and bustle that the “real world” will have them face. We want students to graduate thinking about what their future will bring, not whether they will be able to afford to support their needs.

 We believe that confidence is the key to success, that if we are able to distill the necessary confidence in students with the information we cover that it will allow them to make informed decisions when faced with debt accumulating decisions.

We want students to focus on their future, and what they need to do to accomplish their goals- This has essecially become our goal.

The Challenge

Declining incomes, growing debt, and high costs of education, homeownership and healthcare are combining to make this generation the first to not surpass the living standards of their parents.

The 3-Part Solution
Cred Edge helps solve this problem in three distinct ways:

 In-School Education
We send volunteers from the financial sector into schools to speak with students about their credit and finances so when they graduate they are equipped with the information and resources they need to be in the best possible position with the debt they’ll accumulate after high school. More about In-School Education here

Real  World Practices
We use shocking statistics and real world experiences to reveal how bad financial decisions now affect us seven years into the future. We show first-hand accounts of people who didn’t take credit and loans seriously early on, and what they are going through years later because of it. We then provide students with techniques that can be used to avoid those situations while at the same time allowing them to build and maintain high credit scores. More about Real World Practices Here

On-going Sponsoring & Support
 We follow up with the students we reach out to in an attempt to point them in the right direction once they are faced with decisions that will bring on debt. Whether it is credit cards or student loans, we know where to get them the help they need. More about On-Going Sponsoring & Support here