Re: Credit card paydown and credit limit

"Prometheus" <[EMAIL PROTECTED]> wrote in message
news:<[EMAIL PROTECTED]>...
> Hello,
> 
> I just made a rather large ($8,000.00) payment on my credit card, which
> amounts to about 50% of the balance.   Immediately after making the payment,
> the credit card company reduced my credit limit by the same amount as the
> payment.  The card is now maxxed out... again!   They said that this was due
> to what they "found" on my credit report.   I knew my rating was mediocre,
> at least in part due to the fact that I was carrying high revolving credit
> balances.
> 
> So, wondering out loud:
> 
> - Is this legal?  I know they can, or can not, issue credit to anyone they
> want, but they "nicked" my credit limit close to $8,000.00!
> - Legal or no, do I have any recourse?
> - Is it typical for credit card companies to penalize card-holders for
> catching up on their balances?
> - Pursuant to the above, how "bad" does one's credit have to be before the
> card companies reduce our credit limit the amount of the paydown???
> 
> Thanks,
> P

These all sound like things that would be left to business decision
makers at each credit card company. As a practical matter, if you have
maxed out their credit card, they coulnd't very well reduce their
credit limit while it was maxed out. But maxing out your credit card
in itself reduces your FICA score, and would make them want to
decrease their exposure to you, possibly all the way down to zero.
Think about this credit limit decrease as having been pending for a
while, just waiting for you to pay down some of the balance, so that
it could be implemented.

There is a saying that if you owe the bank $100,000 and don't have it,
you are in trouble. But if you owe a bank $100,000,000 and don't have
it, the bank is in trouble.