Reasons for credit line reduction | Find Learn Save

What is a credit line reduction, and what are some reasons for why my credit card company would reduce my line of credit?

What is a credit line reduction, and what are some reasons for why my credit card company would reduce my line of credit?
Start your FREE debt assessment
Choose your debt amount

A credit line reduction is exactly what it sounds like-your bank is reducing the amount of credit available to you. A credit line reduction can be made at a consumer's request. For example, if you have loaned your credit card to your daughter, but want to make sure she doesn't spend too much money, you could call the bank and have your credit limit reduced.

On the other hand, your credit card companies may decide on their own to reduce the amount of available credit extended to you for several reasons. Primarily, credit line reductions result from a bank deciding that you are too great of a credit risk to maintain the credit limit it had previously extended you. Credit line reductions usually occur after a review of your credit report, which most banks conduct on a periodic basis. If your credit score has dropped significantly since the last time the bank reviewed your credit report, the bank may decide to reduce your credit limit or cancel your card altogether. A credit line reduction may indicate problems with your credit history, so you may want to pull a copy of your credit report and review it to try to identify the source of the problem. has more information to solve all of your credit issues and credit solutions at:

I hope this information helps you Find. Learn. Save.



Recent Oldest
1500 characters remaining
  • BA
    Sep, 2009
    You may be right: Bank of America's actions may not be legal under the Credit Card Accountability, Responsibility and Disclosure (CARD) Act. I encourage you to speak with an attorney in your state who specializes in consumer protection law.
  • B
    Sep, 2009
    Last week I got some email notifications from Bank of America, than later via mail as well, that 3 of my credit cards and a credit line has been reduced; altogether by more than 65%. All these accounts had only 12% of the credit line debt. At life long interest rate (very low), and never been late. My income didn't change, no delinquencies, and no fraud on my credit history. My mortgage is always paid on time, we own our house since the beginning of 2004. To me this action is NOT legal. In fact, it's intimidating and discriminating. Intimidating because with such reduction it immediately looks like the credit line is more than 50% used, which backfires on me, the consumer. Checking some ratio even a simple search for cheaper auto insurance and such makes the quotes higher. Discriminating, because families with kids (babies) are no longer good customers to the bank!? The only changes that happened to our family is that we no have 2 very young kids, but it never affected our responsibilities to our lenders. I think it's NOT legal on the Bank's behalf to change terms without a legitimate reason. It's not even in the fine print. I really think this would make a fine topic on the news. The banks got plenty of bail-out money to help consumers in trouble. This may be the banks' way of getting these funds back from those who are making every effort to not to be one of them.
  • BA
    Aug, 2009
    If you mean, can you settle an amount owed on a line of credit if you offer the creditor a lump-sum? Sure, that's a possibility, especially if you are behind on payments and the account has gone to collections.
  • A
    Aug, 2009
    will it be possible to reduce the amount on a line of credit if I pay it off in one payment .talking to the bank directly.
  • R
    Apr, 2009
    That's the sad part about these credit card companies, they can do this sort of a thing and will not specify exactly what the reason was. One of the reasons might just be due to this down economy the bank is just playing it safe.