One Day Late, Your Credit Limit Will Drop

In the past few months, several credit cardholders have had their credit limits slashed, but I haven't heard anything like angie's recent experience:

Washington Mutual dropped my credit card limit from $3,500 to $316. Their reason for doing so was because my account is currently delinquent. I missed my payment by one day and was also given a refund for the late fee because my account is in good standing. Wow!

It seems very over the top (like using a sledge hammer instead of scalpel) but not surprising considering WaMu's recent bankruptcy filing.

You don't have to be late for your credit card issuer to drop your credit limit. These days, they're citing "market conditions" as a reason to rescind your credit limit.

What can you do? Keep your balances low. Even better, pay them off. That's the only way to ensure a credit limit decrease won't put you over your credit limit. Stay aware of your credit limit. Call your issuer's customer service to check your limit before making purchases.

Related

• 5 Ways to Avoid Over-the-Limit Fees
• How to Get out of the Over-the-Limit Fee Trap
• 5 Principles of Making Credit Card Payments