Increase Credit Limit

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Decrease Credit Limit

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While this site is all about increasing your credit limit and the benefits that it can provide. However, there is a flip side of the coin as well… can you decrease your credit limit? And how can you do it? Also, what are the repercussions from that?

The first answer is that yes, you can decrease your credit limit. You simply have to contact your lender and ask them to decrease the limit, or in some cases, cancel the card. In some cases, they could decrease it themselves, though it doesn’t seem to happen very often.

So, will that affect your credit score? It could, but like is often the case, it depends on your situation. Generally speaking, a lower credit limit will lower your credit utilization rate, which could have a negative effect on your credit score. This is especially true if it is a large decrease of the limit… it could have a larger adverse effect on the utilization, which will likely cause the credit score to go down a little bit, at least in the short term.

However, if it is just a small decrease, you will likely not notice much or any change to your credit score.

On the flip side, if the smaller limit causes you to have a smaller balance and be better able to pay the card off, it could (in this roundabout way) have a positive effect on your score, because the worse utilization is being made up for by a better payment record, which is more important for your score.

While you may not want to decrease your limit unless your spending is out of control and you can’t keep it in check with a high limit, it can be done. While it can negatively impact your credit score, it shouldn’t have a large impact unless you are seeing a large decrease.

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