Will paying down my credit card cause them to lower the limit?

I have heard (I think from Suze Orman) that during these bad economic times, that when you pay down your balance, the credit card company may lower your credit limit. I really don't want that to happen. Has any one heard of this happening.





Also, as far as the new credit card laws that will be taking effect, will they include protection that do not allow credit card companies to lower your credit limit unless you have had late payments?|||Yes. This is happening rampantly right now.





It really depends on your history and how much available credit you have but I would expect them to lower your limit as you pay it down. Not sure on the percentage of accounts it's happening to, but I would say the majority. A bunch of BS as far as I'm concerned, but definitely is happening.|||KC,


Im not sure what Suze Orman is referring to, but what i do know is that credit card companies normally do a credit review, (either annually or semi-annually). The purpose of these reviews is to make certain decisions on credit limits, interest rates, etc. This is based on your credit standing, how often you make payments, if you had any bad history, or your average balance on the account.





Unfortunately, when you sign the papers, credit companies can choose to do anything they wish (within the law, of course). Speak to a representative if you are fuzzy on the details. Also, make sure you read all the necessary disclosures on balance limits and interest rates.





I hope i was able to help you out!





Hernan





P.S I have a book availabe on the subject if you are interested. You can find it here:


http://www.lulu.com/content/7394327|||that is not true unless the company has come to view you as a higher risk. If this is the case, they will most likely close the account anyway. Ask any chase customers who have been paying on time and had their accounts closed anyway.





Best thing to do is go ahead and pay them down. It will save you the extra interest. If they are going to close the account or lower the limits there is nothing you can do about it. Having lower balances will help your credit score anyway and make this scenario less likely.|||The credit card issuer lowering the credit limit before that law gets in to effect. It might be difficult to lower the limit later. But it's not happening for everyone. I am not using a card for last one year, but they increased the limit on that.





I found the article interesting


http://www.cashorcredit24.com//new-credi鈥?/a>|||I have only had one cc lower my limit and that was one that I have not used in 3 years... CC want you to spend money.. that is how they make money.. so lowering limits is not in their best interest|||I've hadn't heard that. And paying down is the smartest thing you can do since you are paying interest on that money.