Capital One Is Cutting Credit Limits for Many Customers

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Capital One credit cards

Capital One Is Cutting Credit Limits for Many Customers

If you have a Capital One credit card, it is a good idea to take a look at your account and see if your credit limit is still the same. You can check this by looking at previous statements and compare the credit limit to the one showing in your account currently. Some customers have seen drastic decreases in recent weeks, sometimes as much as 75%,

We have seen a trend of credit card issuers cutting limits for cardholders in recent months, due to the coronavirus pandemic. Capital One has ramped up the practice more recently as the bank tries to limit its exposure as the U.S. reduces support for millions of unemployed Americans.

“Capital One periodically reviews accounts based on a variety of factors and may make changes to existing credit lines,” the company said in a statement to Bloomberg. It is not clear how many people are affected.

Capital One is the third-largest U.S. credit card lender. At first it targeted riskier customers with lower credit scores, but in recent years Capital One has released some premium cards.

These cuts seem to be all across the board, so if you have any Capital One cards, check your accounts so you know what your limit is at least and it doesn’t come as a surprise down the road.

How it Effects Customers

A lower credit limit makes it more difficult to borrow in an emergency during a pandemic. With a credit card you can make purchases that you might not be able to afford. You can then pay your balance over time. It is not a good idea to carry a balance, since you will be paying a high interest rate, but if it is your only option, it is a good one to have.

Additionally, a lower credit limit also affects you even if you don’t plan to finance any purchases. It can potentially lower cardholders’ credit scores. The FICO score takes your credit limit into consideration when determining your credit utilization rate. Utilization means your credit card balance compared to your available credit. It is a good rule of thumb to keep your balances below 30% of your limit.

Conclusion

We have seen several issuers do this in recent months. So, it is not surprising that Capital One is also cutting credit limits for some customers. Many have complained on social media, especially about the timing of these cuts.

Let us know if Capital One, or any other issuers for that matter, have lowered your credit limit recently.

DDG
Based in NYC. Points/miles enthusiast for years and actively writing about it for the last two years at Danny the Deal Guru. I'm always looking out for deals. Making a few bucks is always nice, but the traveling is by far the best part of this business.

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7 COMMENTS

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7 COMMENTS

  1. Just received a letter from Capital one that they had lowered my credit limit from $20,000 to $5,000 because I have not charged a lot in the last two years. My credit score is well above 800 and I always pay my balance off every month.

  2. Nieman Marcus- a care I use very infrequently lowered my credit limit. Strange because my credit score is higher than ever and I hold no balance on any of my regular credit cards.

  3. Venture card CL went from $30,000 to $10,000. Perfect payment record for entire 10 years and 800+ credit rating. Told never used over $10,000 in any month so shouldn’t be a problem.

  4. They cut mine about 25%, but I haven’t really used the card much for about 18 months. Still, it’s odd they gave us no warning.

  5. On Aug 27 Capital One reduced my credit limit on my SAVOR mastercard by a whopping 67%! I have had the account since May 2018. I make all payments on time and in full and it still happened!! Shame on Cap One! Shame, shame , shame. SHAME ON CAP ONE!!!

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