Personal Finance

can banks lower your credit limit?

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  • Jun 4th, 2016 12:36 pm
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[OP]
Member
Jun 28, 2011
400 posts
106 upvotes
VANCOUVER

can banks lower your credit limit?

I've never come across this situation and perhaps it's more so the case in the US. In my case, the banks offer me credit limit increases; I've declined two of them recently. (one for my RBC Mastercard and the other for my LOC)
In which situations can the banks lower credit limits? (cards and LOC's)
I just opened an account with Tangerine on a trial basis and RBC is still my main bank. (investments and loan).
I realize that they (RBC) will notice a shift in my deposits and I'm wondering if that will prompt them to do things like lower the limit on my LOC.
Thoughts and comments?
15 replies
Sr. Member
May 5, 2009
616 posts
320 upvotes
Vancouver
No, never seen that with the multiple times I've switched banks. The banks can always lower the limit but they usually wont. The rates they offer you probably won't be as good but otherwise should be the same.
Member
Aug 3, 2013
488 posts
288 upvotes
Durham
Had that happen with CIBC. MBNA, crappy tire too (for non big banks).
Member
Aug 3, 2013
488 posts
288 upvotes
Durham
No, but I suspect non-activity with CIBC and CT, and too much available credit with MBNA (balance transfers).
[OP]
Member
Jun 28, 2011
400 posts
106 upvotes
VANCOUVER
suikoyen wrote: No, but I suspect non-activity with CIBC and CT, and too much available credit with MBNA (balance transfers).
Ok, yes, I can see them lowering the limit with non activity. Thanks!
Sr. Member
Mar 3, 2015
699 posts
95 upvotes
Scarborough, ON
They can lower and by law they don't have to give "a reason" and they can even "close" without reason if u breach their terms and conditions or too much complaints, fraud, inactivity for yrs or to much denial of transactions were u get refunds in banks expense.

I know BMO for sure has zero tolerance on refunds were Customers deny they claim they did purchase get refund and get their accounts closed and get blacklisted & banned.
I know 4 people who got banned from BMO credit cards because of that.
Deal Fanatic
Apr 16, 2007
8004 posts
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Financial District B…
The bank giveth therefore the bank can taketh away
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Deal Addict
Jan 2, 2015
1602 posts
603 upvotes
Toronto, ON
Quite a few people in the UK had their credit limits suddenly lowered during the credit crisis (the British banks were far too nice beforehand). This especially happened with overdrafts, but also credit cards.

There were stories of people getting a letter saying you have a month or less to pay off a lot of debt. If that was overdraft, you were really screwed.
Deal Addict
User avatar
Aug 9, 2011
1944 posts
332 upvotes
GTA
Any credit card company can lower your limit if they feel that you may be at high risk, so yes , they can lower your limit without your consent. They usually do it if you're scores have taken a dip or something that is going to make you seen more risky - esp if your limit is high.

Usually those in collections and have balances that are over its limit gets lowered for risk management purposes
Deal Addict
Aug 31, 2014
1488 posts
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YVR, BC
I have a MBNA smart cash, opened a MBNA RWE and within a few months MBNA reduced the credit limit on my MBNA smart cash.........
Deal Fanatic
Apr 16, 2007
8004 posts
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Financial District B…
604nation wrote: I have a MBNA smart cash, opened a MBNA RWE and within a few months MBNA reduced the credit limit on my MBNA smart cash.........
Thats a little different as they limit and control their exposure amongst products
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Deal Addict
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Aug 16, 2009
1492 posts
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604nation wrote: I have a MBNA smart cash, opened a MBNA RWE and within a few months MBNA reduced the credit limit on my MBNA smart cash.........
MBNA did something similar. They lowered my RWE from 10k to 3k while I had a balance of 1k with them. I think they did it because my utilization ratio jumped up as I closed out some unused credit products. I probably should have staggered it instead of closing them all at once, put me from 30% to probably well over 60%.
Deal Fanatic
Mar 24, 2008
6053 posts
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Toronto
Is this a serious question, of course the banks can lower your limits for any reason (but probably not for opening another credit card). You are borrowing from them, remember?
Illegitimi non carborundum
Deal Fanatic
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Sep 7, 2004
6146 posts
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West GTEH!
Yes they can.
Amazon Visa lowered my CL because I didn't use the card. Went from 7K to 400 :-0 .
Good thing I noticed my card was expiring and I didn't receive a renewal card. Called to inquire and they told me there wasn't activity for awhile so they lowered the CL based on my last statement balance without informing me. > :(
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