Why You Should Lower Your Credit Card Limits

[sonarrat]

Originally Posted by JustChar

Credit to debt ratio is very important and can affect your FICO scores.

Understanding the Credit to Debt Ratio.

From what I have been told you never want to cancel your credit cards especially the older ones, and you never want to decrease your credit limit since it affects your credit to debt ratio which can lower your FICO scores.

But, then maybe that is all hogwash and I have been fed the wrong info.

It absolutely is hogwash - and so is what they're trying to say now. The banks are telling you to do the things that are good for the banks, not for you. When times were good, it was making them money to have customers with enormous credit accounts regardless of whether they were actually using them. Now it has turned around to bite them, and they're making everyone dial back.

Last I checked, the bank doesn't give a rat's behind whether you make enough income for the amount of credit they're extending, whether you could make your payments, whether you wind up on the street because they extended you an offer you should have refused. It's all a game to them. And for playing games with all of us, with the whole country, they have the gall to judge us based on our loyalty? Right!!

You know what the best state to be in is? No debt except to invest in a business. Interest payments are a tax on those who can't save.

[Elke Mariotti]

Originally Posted by babyblue3

It seems to me from what I have been told and read here no one knows which way to go. Say you have four credit cards, 2 you have high balances on because you are only paying 2.99% interest on and the other 2 you have alot of available credit on ($11,000) that you always pay off at the end of the month. You keep these open so your debt to available credit ratios are good, but then they tell you you have too much available credit! Which lowers how much someone wants to loan you for a car,etc. Also someone said that will have them charge you a higher interest rate on a loan. This is just nuts. Any simple suggestions on this dilema?

Seems you discovered a thread that is a year and a half old; some things have changed since then.
Frankly, there is nothing "simple" about the process .
With regard to your balance/no balance question, it depends on what you're trying to accomplish: are you trying to pay down your debt asap or are you trying to improve your FICO score in short order? Different goals can call for a different approach...