Reduce credit card limit

[light84]

Anyone done this before?

I think the banks have given me too much credit on cards and I prefer to lower the credit limit on the cards actually

 

[sohguanh]

Anyone done this before?

I think the banks have given me too much credit on cards and I prefer to lower the credit limit on the cards actually

Hahaha first time I see. Credit card issued to you is to ask you spend so they can earn so why would they reduce your limit? The only time they reduce is they scared you incur already no monies pay them.

Nowadays in letterbox you can receive a pre-signed cheque from those cc banks, you deposit the cheque monies lent to you already can you believe it? They want you to borrow monies from them.

Anyway I have not tried to reduce cc limit before. Kind readers who have done that can share?

 

[reddevil0728]

yea why not? Call the bank and ask?

 

[Squaredot]

Anyone done this before?

I think the banks have given me too much credit on cards and I prefer to lower the credit limit on the cards actually

I have done it before.
Just call the bank to reduce to a credit limit you are comfortable. The reduction is permanent, which means you need to submit documents in future to increase your credit limit.

 

[BBCWatcher]

Yes, you can reduce the credit limit. Usually the bank has a mail-in form for that purpose, but if you cannot find the right form then contact your bank to ask.

A few cautions are in order:

1. There's no guarantee that if you want to raise the credit limit later that you'll be able to do so.

2. A request for a credit limit increase will ordinarily require a credit report inquiry. An inquiry may slightly reduce your credit score.

3. Many banks won't block charges over the credit limit — not all such charges at least — but will charge an overlimit fee.

4. Reducing your credit limit can effectively increase your credit utilization (the amount of credit you use versus your total credit line). Higher credit utilization may reduce your credit score.

For these reasons I don't generally recommend reducing your credit limit. Instead, set up your card for automatic full balance GIRO payments, and configure SMS (or other push) alerts whenever the card is used, at the lowest threshold the bank allows.

 

[reddevil0728]

Yes, you can reduce the credit limit. Usually the bank has a mail-in form for that purpose, but if you cannot find the right form then contact your bank to ask.

A few cautions are in order:

1. There's no guarantee that if you want to raise the credit limit later that you'll be able to do so.

2. A request for a credit limit increase will ordinarily require a credit report inquiry. An inquiry may slightly reduce your credit score.

3. Many banks won't block charges over the credit limit — not all such charges at least — but will charge an overlimit fee.

4. Reducing your credit limit can effectively increase your credit utilization (the amount of credit you use versus your total credit line). Higher credit utilization may reduce your credit score.

For these reasons I don't generally recommend reducing your credit limit. Instead, set up your card for automatic full balance GIRO payments, and configure SMS (or other push) alerts whenever the card is used, at the lowest threshold the bank allows.

It’s a very basic question dunno why you need to think so much again.

 

[wira]

some banks have capabilities to allow you set lower spending limit for your cards.

For eg DBS app allows to set spending limits for each card in case if you scared overspend or for security reasons in case your card is stolen

 

[caesium5]

Just call the card center and they will reduce the credit card limit. Straight forward as that.

I assume that you have done your calculations and concluded that your routine spending will be much much lower.

However, in the rare occasion where you need to raise the credit limit (eg for that one-off big purchase or year end travel) but unable to get approval, you can transfer cash into your credit card account and your credit limit will be higher. That's what several card center had previously advised me.

Edit: You can check with your card center before deciding.

 

[silverbomb]

Anyone done this before?

I think the banks have given me too much credit on cards and I prefer to lower the credit limit on the cards actually

If you're doing this for many cards at a go, do note that each credit review means they will access your credit report and each inquiry will impact your credit score in the short term. The impact will even itself out over long term but if you are looking to maybe get a loan in the short term (housing, etc) then best not to do the credit limit review before then to keep the score healthy

 

[light84]

Hahaha first time I see. Credit card issued to you is to ask you spend so they can earn so why would they reduce your limit? The only time they reduce is they scared you incur already no monies pay them.

Nowadays in letterbox you can receive a pre-signed cheque from those cc banks, you deposit the cheque monies lent to you already can you believe it? They want you to borrow monies from them.

Anyway I have not tried to reduce cc limit before. Kind readers who have done that can share?

Due to too many phishing attempts these days, my balls shrink upon reading it so better reduce credit. On average, I only use like 5% to 10% of the credit limit.

 

[reddevil0728]

Due to too many phishing attempts these days, my balls shrink upon reading it so better reduce credit. On average, I only use like 5% to 10% of the credit limit.

That can be a safeguard, but at the end of the day your diligence still the most important

 

[BBCWatcher]

Due to too many phishing attempts these days, my balls shrink upon reading it so better reduce credit. On average, I only use like 5% to 10% of the credit limit.

As I mentioned but need to repeat, many/most banks will happily approve charges above your credit limit. They're not required to decline them. But they will apply an overlimit fee if/when you cross the limit.

Your credit limit isn't much of a defense. I believe you're seeking a charge limit. As someone else mentioned, DBS evidently offers that feature on its cards.

 

[light84]

As I mentioned but need to repeat, many/most banks will happily approve charges above your credit limit. They're not required to decline them. But they will apply an overlimit fee if/when you cross the limit.

Your credit limit isn't much of a defense. I believe you're seeking a charge limit. As someone else mentioned, DBS evidently offers that feature on its cards.

Charge limit is interesting. First time I heard of this. Unfortunately I dun bank with DBS. I’m with UOB and OCBC. How to turn on this feature?

 

[sansanjikikut]

Afaik only dbs has it.

 

[Prof. Utonium]

As I mentioned but need to repeat, many/most banks will happily approve charges above your credit limit. They're not required to decline them. But they will apply an overlimit fee if/when you cross the limit.

Your credit limit isn't much of a defense. I believe you're seeking a charge limit. As someone else mentioned, DBS evidently offers that feature on its cards.

Any sources to show that this applies in SG? I can only find sources of such practices in US.

I came across multiple declined cards while working in the service line during my student days. Unless you meant temp limit increase for special occasions which applies to all banks and a phone call away.

 

[reddevil0728]

Any sources to show that this applies in SG? I can only find sources of such practices in US.

I came across multiple declined cards while working in the service line during my student days. Unless you meant temp limit increase for special occasions which applies to all banks and a phone call away.

I believe in sg, you can’t charge above the limit

 

[crystalnox]

Due to too many phishing attempts these days, my balls shrink upon reading it so better reduce credit. On average, I only use like 5% to 10% of the credit limit.

Just lock cards you don't use, most banking apps allow that nowadays. A bit inconvenient when it comes to spending, but security is never convenient.

 

[crystalnox]

Yes, you can reduce the credit limit. Usually the bank has a mail-in form for that purpose, but if you cannot find the right form then contact your bank to ask.

A few cautions are in order:

1. There's no guarantee that if you want to raise the credit limit later that you'll be able to do so.

I think it was Amex that told me they cannot review and raise my limit for 6 mths after my lowering request.

 

[BBCWatcher]

Charge limit is interesting. First time I heard of this. Unfortunately I dun bank with DBS. I’m with UOB and OCBC. How to turn on this feature?

As mentioned DBS might be unique in offering a charge limit. However, there are a couple ways you can effectively add a charge limit to another credit card:

1. Use a supplementary credit card. These generally have hard charge limits. For example, if you have a spouse/partner then you can "cross-issue" supplementary credit cards: you use his/hers, and vice versa. The primary cardholder can set a sublimit on the supplementary card within his/her credit limit.

2. Use a rechargeable wallet, such as GrabPay, then make your purchases using this wallet. This works rather well with the UOB Absolute American Express credit card as an example, or so I'm led to believe.

I believe in sg, you can’t charge above the limit

You can. I can vouch for that on behalf of a family member's recent direct experience. It's up to the bank and its proprietary credit authorization decisions, but there's no regulatory or legal barrier as far as I'm aware. If it weren't possible they wouldn't have overlimit fees in their price schedules, but they do — and they're very happy to levy them when the occasions occur. It's a good source of revenue/profit. UOB's overlimit fee is S$40. OCBC evidently doesn't have a separate flat fee but does add a 3% uplift based on the balance, at least in certain circumstances. The credit limit may only indirectly affect the charge limit based on whatever proprietary credit authorization algorithms the bank uses. A charge limit, on the other hand, is a hard stop.

So why have a credit limit, you might wonder. And the answer to that, for most banks anyway, is that it provides high confidence to the cardholder that charges within the credit limit will be routinely approved. But it doesn't necessarily constrain the bank. If the bank considers the cardholder to be a good credit risk at that moment (yes, often) then the bank may be very happy to approve the charge(s) above the limit — and collect the extra tribute.

Anyway, net net there's no guarantee a lower credit limit will be binding on the bank. A particular charge limit would be.

 

[reddevil0728]

You can. I can vouch for that on behalf of a family member's recent direct experience. It's up to the bank and its proprietary credit authorization decisions, but there's no regulatory or legal barrier as far as I'm aware. If it weren't possible they wouldn't have overlimit fees in their price schedules, but they do — and they're very happy to levy them when the occasions occur. It's a good source of revenue/profit. UOB's overlimit fee is S$40. OCBC evidently doesn't have a separate flat fee but does add a 3% uplift based on the balance, at least in certain circumstances. The credit limit may only indirectly affect the charge limit based on whatever proprietary credit authorization algorithms the bank uses. A charge limit, on the other hand, is a hard stop.

So why have a credit limit, you might wonder. And the answer to that, for most banks anyway, is that it provides high confidence to the cardholder that charges within the credit limit will be routinely approved. But it doesn't necessarily constrain the bank. If the bank considers the cardholder to be a good credit risk at that moment (yes, often) then the bank may be very happy to approve the charge — and collect the extra tribute.

Anyway, net net there's no guarantee a lower credit limit will be binding on the bank. A particular charge limit would be.

so you can but still depends right?