Why has my credit card limit been reduced?

“Why did my credit card limit go down??” is one of the main complaints made by customers at bank branches and call centers.

And the reason is always the same: from one day to the next, the card limit is reduced without any explanation, complicating the customer's life.

But why does this happen? Is it legally allowed? What are the impacts on the holder's financial life? Is it possible to reverse the situation and get the limit back?

We know that all these questions are going through your head right now, and for this reason, we have produced content that answers them all.

Want to understand more about this subject, and perhaps recover your limit? Then continue reading!

The relevance of credit cards in monthly income

If you are not in the habit of using a credit card, it is normal that you do not understand the distress of those who search for “why did my credit card limit decrease?”.

But the truth is that most people who use the card use it as a kind of “income extender”.

And the reason for this is very simple, since a pair of sneakers costing R$300.00 can become affordable when paid in 5 installments.

Therefore, for someone who earns R$1,320.00, the tennis shoes paid in installments only compromise R$60.00 (less than 5%) of the monthly budget, whereas if they were purchased outright, they would compromise R$300.00 (more than 20% of the monthly income).

So, the credit card ends up being an excellent ally for those who cannot spend a considerable part of their salary to buy sneakers, a bag or whatever.

Therefore, as long as it is used wisely, the credit limit can help you achieve more than your monthly salary alone would allow.

For this reason, unexpectedly reducing the card limit can cause some losses to customers, who were counting on it to complete some plans that month.

And, if you are in this situation and don't know what to do, don't worry, because below we will explain why this happens, and if there is a way to solve it.

Why has my credit card limit been reduced?

Throughout the previous topic, we were able to understand why limit reduction causes so much concern among customers.

And, if you are part of the group that simply received a notification from the bank app about the limit reduction and don't know what caused all this, we will explain it to you now.

The first thing we must understand is that limit reduction is not an illegal practice, so the bank can carry it out at any time, and without prior notice.

The reason for this is that the card is a form of credit, and as with any form of credit, granting credit is at the discretion of the creditor.

This way the bank (creditor) can decide if makes available, as makes available and by which period.

Therefore, if the creditor wishes to reduce the limit made available, for whatever reason, he can do so.

However, it is not common for a reduction to occur without justification, so there are some reasons for this.

See below what these reasons are, in order to answer the question “why did my credit card limit decrease?”.

Bank security criteria 

Providing credit is an operation that poses some risks to the creditor, after all, many things can cause losses.

Customer default, falling company shares, losses in other sectors and many other problems can harm the bank's financial sector.

And when this happens, for security reasons, it is common for banks to reduce customers' credit limits.

Therefore, if the company's situation becomes negative, the credit made available will not represent such a large deficit.

Therefore, if the card limit has decreased, one possibility is a security action by the bank itself.

To find out if this is the problem, check online to see if other customers are complaining about the same issue, on sites like Reclame Aqui.

Default

The availability of a credit limit works as a relationship of trust, since the bank grants credit in the hope that the customer will pay the bill on time.

Therefore, when you frequently delay your bill for a few days, or fail to pay for a long period, the bank may reduce your limit.

This is because delay indicates difficulty in paying the bill, so, to avoid debt, the bank chooses to reduce the credit granted.

So, if you’re wondering “why did my credit card limit go down?”, check to see if you haven’t been paying your bills past the due date.

Even if it's just 1 or 2 days late, this can happen, so you need to be careful!

Score variation 

One of the basic criteria for defining the value of the limit granted is the customer's score score.

This is because the higher the score, the more reliable the customer's good payment profile is, so it certainly offers greater guarantees to the bank.

However, in our daily lives we experience a series of situations that cause score variations.

The simple fact that you go a few weeks without making a purchase is enough to reduce your score.

Or, if you just have an energy bill that is overdue for 1 week, your score may change, even if it is just a few points.

And, when the variation is downward, it is common for the bank to reduce the limit, as it understands that your good payer profile has decreased;

So, if you don’t want to ask yourself again “why did my credit card limit go down?”, take care of your score!

How do I recover my credit card limit? Is it possible to appeal?

By now you already know the answer to the question “why did my credit card limit decrease?”.

This is because the reason is certainly one of the 3 possibilities explained above, as they are the most common causes.

Therefore, all that remains is to talk about the possibilities of recovery. After all, is it possible to reverse this limit reduction?

In principle, it is not possible to review it in the first few days, since the reduction is the result of a credit analysis carried out by the bank.

And, it is known that these analyses are periodic, therefore, there is no point in trying on the first day, as the result of the analysis will be the same.

However, there are some practices that can help you see your credit limit in some time, such as:

• Invest in the relationship with the bank
• Always pay your bill on time 
• Check the conditions for gaining your own bank limit 

These practices work as an “investment” in your relationship with the bank, in order to gain trust.

And as we know, trust is synonymous with providing credit, so it can certainly work.

It is worth saying that nothing is guaranteed, and there is no set time to have the limit returned, but it is certainly worth trying.

The better your credit profile, the easier it will be get limit or even loans, so take care of your financial life to always have access to credit!