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Unfortunately, yes - card cancellation for any reason can hurt your credit score. There are several factors that determine your credit card limit. If you regularly hit the limit on your card, it can greatly increase your credit utilization ratio, which in turn will have an adverse impact on your score. But if you’re carrying a balance on your card, a lower limit may increase your credit utilisation rate (the amount of credit you’re using compared to the limit on your card). This is because the moment a card is canceled, your total available credit limit is reduced by the amount of credit limit that a certain card had. Be polite but direct. Carrying a higher balance than normal. Or, they may not. First, the type of card plays a major role. Between here (mostly) , r/churning, r/personalfinance and a few others I was able to achieve my goals 10 fold of increasing my credit limit (I actually doubled it!) Here's the nightmare!! When I opened a letter from American Express dated February 15, 2020, I definitely didn't expect to see that the credit limit on my Amex EveryDay® Credit Card from American Express “Generally, when you see a lender reduce a credit limit, there were indicators that the person may have trouble paying their debts,” Rod Griffin, senior director of public education and advocacy for Experian, told The Balance via phone. Subscriber Credit card companies can slash your credit limit for a variety of reasons. If you don't want your cards to … I have an excellent credit score (836 according to TransUnion's model, and 818 according to Equifax), but I quickly realized why this happened: I hadn't used that card in quite a while. My limit was $1400 so I paid it down to $50 so i could fly my wife to UCLA to have open heart surgery and they immediately lowered the limit to $100. Especially during times of economic crisis, credit issuers may be more willing to work with you. If you’re not satisfied, you can consider opening a new card and transferring your balance. When a credit card issuer closes your account, your credit limit could be lowered due to inactivity, which translates to a decrease in available credit. This will show recent activity on the card and could help prevent an issuer from closing it down due to inactivity. “If your scores are in the low 700s, a change of even 20 points can be meaningful in terms of qualifying for the best rates,” Griffin said. At a moment’s notice, your credit card issuer can lower your credit limit. “It’s quite an issue,” says Linda Sherry, director of national priorities for Consumer Action. If your credit card company does suddenly cut your credit limit, there are some simple steps you can take.Â. Call your credit card issuer’s customer service department and ask why your credit limit was decreased. How to Use a Credit Card to Build Credit: A Step-By-Step Guide, First PREMIER Bank Secured Credit Card Review: Build Credit Expensively, The Big Reason You Should Keep Credit Card Balances Low, factors that determine your credit card limit, How FICO Scores Look at Credit Card Limits, If the issuer wants to reduce the overall amount it’s letting customers use. Business Insider may receive a commission from The Points Guy Affiliate Network, but our reporting and recommendations are always independent and objective. Does card cancellation due to inactivity hurt your credit score? We’ve seen many card issuers reduce credit limits due to the financial uncertainty of COVID-19 (including Chase). This could also mean your revolving   percentage could go up, and it could go up a lot. Just because the credit card company sets a limit at a specific point in time doesn't mean your finances will always be the same. Call the customer service number on the back of your card. 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