Saturday, June 9, 2007

How to Reduce Credit Limit

How to Reduce Credit Limit

Reducing your credit limits could keep you out of financial trouble. Maxing out high-limit credit cards and other accounts while times are good could prove disastrous if you unexpectedly lose your job or have to stop working because of a serious illness. Those are just a few reasons some people voluntarily slash credit limits on their accounts. It makes sense to reduce your credit limits during a period when your balances are low. That allows you to lower the limits yet retain some available credit.

Instructions

    1

    Gather your current billing statements. Check your credit limits and balances. Or get the information by calling your creditor's company's customer service department.

    2

    Determine how much of your available credit you would like to cut. Financial publishing website Bankrate.com recommends that your total credit limit not exceed 20 percent of your household income. That means households with gross incomes of $30,000 should limit credit lines to $6,000. Households with $60,000 in gross income should cap lines at $12,000, and so on.

    3

    Call your creditors. Instruct them to reduce your credit limits to the level that you specify. You have the right to make such a request and to turn down future credit increases if you wish.

    4

    Check your next billing statements to confirm that the credit limits were reduced.

0 comments:

Post a Comment