High balances, worried about cutting limits/raising rates

Hello all,

Here is my situation. I have the following credit cards:

1. Citi Visa, Limit - 3800, Balance - 3700
2. Chase M/C, Limit - 800, Balance - 760
3. Chase BP Visa, Limit - 600, Balance - 595

As you can see they are pretty well maxed out. I just started a new job and will be able to pay all of these down to a zero balance within the month. My question is this. I have read all over the internet that card companies have lately been cutting limits and raising rates due to the bad economy. Is it probable that the same will happen to me? I have never been late with a payment but have gone over the limit on all of them at least once. Also what are the chances that the accounts would be closed? All of these accounts have been open for about 1.5 years, but have been maxed for about 6 months.

[Jeanie]

Fclensy,

It All Depends On What Is Stated In That Particular Cred Card's Terms And Conditions..make Sure You Read Them And I Am Sure You Will Find The Answer, If Not, Give Them A Call And Talk To A Head Person..

Good Luck..


~jeanie

From the date on your submission, you hopefully have paid off your credit cards. If not, here is the formula to follow:

1 - Make minimum payments on every credit card on time each month.
2 - With any extra money that you have, pay as much as you can on the credit card bill with the highest interest rate first.

Will the credit card companies lower you credit card limit or raise your interest rates? That depends on a few points, and each company has its own criteria for determining how they will treat a customer. First, how often have you gone over your credit limit and how recently has this taken place? Second, what is your FICO credit score. Third, what is your current ongoing balance as a percentage of your total credit limit for each individual card, as well as for all your card combined.

If you have managed to pay off your cards substantially, then it is less likely that Chase or Citi credit cards will come back and lower your credit limits.

To maintain a high credit rating, you do not want your balance to exceed more than 9% of your credit limit. After this point, it begins hurt your credit score. Some financial experts point out that you never want to exceed 20-30% of your credit limit, as this will more severely affect your score.

But here is some good news, Jeannie: once you have reduced your balance, your credit score will improve rather quickly. What does this mean for you? Interest rates for credit cards and loans will be less. If you are planning any big purchase during the next year, such as for a home mortgage or a car, then taking measures NOW to raise your credit score will save you thousands over the life of the loan.

One important note: Never cancel a credit card. It's not that cancelling the card hurts your credit rating. Your overall credit limit is lowered, and this does hurt your score. Use your cards at least every few months, so that the banks will not cancel your cards from their side.

Best Regards,
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More and more credit card companies are now resorting to cutting limits/raising interest rates. Given the economic situation - recession turning to depression, more and more folks will be filing bankruptcies.