Credit Card no HistoryNo history of credit card
I have several credit card accounts that I use for different things. Could vendors do that? An example might be that a supplier may have made a political choice to lower its overall risk on debts and thus lower credit lines for a group of clients. Card companies also check customers' credit lines on an ad hoc bases and may choose to lower their credit lines by analyzing your spend behavior and the information they receive from credit bureaus.
In the credit sector, everything revolves around the management of credit risks for suppliers. When you have a credit line of 5,000, your supplier must be able to loan you that amount and take the risks of not paying you back. Reducing credit lines will reduce the amount of leverage that a supplier has to pay.
Sometimes suppliers will make political choices to lower their credit lines across a broad front or for a large number of clients. The result is a reduction in the bank's unutilised overall credit rate - the difference between what the borrower has disbursed and what they can disburse. Banks may in such situations be particularly keen to demonstrate that they are making adequate credit lines available to their clients.
Unless you make regular use of your full credit line and plan to take out a large exposure, a lower credit line may have little effect on you. When your credit line is £2,000, your credit rating is 25 per cent. What's your credit rating? However, if your maximum falls to 1,200, your interest rates will rise to over 40 per cent. What's more, you'll be able to get a higher percentage.
When you apply for a credit (including a mortgage), the creditor will look at your actual credit utilization. When your limits are reduced, what happens? You may have used your card less due to a longer period of leave abroad or sickness - or you may have a particular need for a higher credit line.
But new card requests are affected by the providers' credit policy and your credit history, so there is no assurance that you will be given more credit. Continue to use the card for smaller transactions and fully disburse the remaining amount each and every months.