Target credit card

[Amrita]

Well this is just a rave but after many years a Hilo Target customer, pay balance in full each month, suddenly without notice my credit line was decreased from $2500 to $1000.  Okay, I've been staying away at 79 cause of Covid.  None the less that seems a poor excuse.  My FICO is in the high 700's.  Grrr. So maybe when the emergency is over I'll stay away just cause this seems petty on their part.  Sent them an email, wonder if I'll get a legitimate answer.

[terracore]

It's not uncommon during recessions for credit issuers to reduce credit limits, close accounts, raise rates, etc

During the last recession Citibank lowered my credit limit by about half and jacked my rate from 9.9% to 29.9%. I was insulted by their letter too because I had great credit and paid my balances every month. They had an option to "opt out" of the rate increase by closing my account, which I promptly did. I had a couple of credit card issuers close my accounts with the excuse that I hadn't used them in a long time, and a few others lowered my credit limit as well.

This time around a lot of lenders have taken other measures like no longer offering HELOCs, and most of the ones that do have terms so unfavorable you wouldn't want one anyway.

But other than that, I don't expect the mass credit tightening we saw the last time around because the FED eliminated the reserve requirements for the banks so that they would have less incentive to tighten credit or start foreclosures, but they are still going to take some measures.

[HereOnThePrimalEdge]

suddenly without notice my credit line was decreased

I've also had several credit card companies send me a limit reduction letter.  I have a high FICO score as well.  I think it's a proactive measure on the part of credit card companies to make sure their customers don't get in too deep during the COVID-19 crisis, and those of us who pay off our balances every month are roped into the policy for seemingly no reason.  My notices all say my spending is far below my limit, so by their logic, I don't need a higher credit limit anyway.

[birdmove]

The target card gives us 5% off every time we use it. Can't afford to not shop at Target.

[eigoya]

I’ve been cheated; been mistreated...I had Alaska Airlines (companion fare) BoA (Amongst others) for years—— but now I hav been loved—Discover!!! Can’t say enough positives

[leilanidude]

so by their logic, I don't need a higher credit limit anyway.
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And when they lower your limit, you end up with a lower credit score which means other creditors may now see you as a higher risk and lower your credit lines as well, which lowers your score again... It is almost like a plan to raise the rates they charge based upon lowering your score thru reduced credit lines...

[HereOnThePrimalEdge]

which lowers your score again... It is almost like a plan...

I recently paid off a mortgage, so have no large loans with my bank (no car loan either.). My FICO score dropped 30 points* because when you pay off a long term loan without fail for decades it doesn’t prove to credit agencies that you’re a reliable and safe credit risk, it says to them 1) “nobody has given this guy a big loan for some reason, and 2) we have one less method to gauge if he has a rapid, detrimental change in his financial situation.  BOOM.  Take off 30 points. That will solve the problem on our end.”

* Nothing else changed in my finances that would affect a credit score.  In fact the only change in my finances is that I now have more money, because there’s no mortgage to pay.

[eightfingers2.0]

The credit score thing is not to help you, it’s just another profit center.

[kalakoa]

Rest assured there is more than one "credit score" so they can sell it to different people for different reasons. Watch your debt offers over the next few months and see if there's a subtle change in flavor.

I receive only "consolidation" offers, at low interest because my scores are high, but obviously based on some assumption about how I intend to manage my credit. However: my mortgage doesn't report, so I don't know how this assumption compares to credit histories that include a bank mortgage.

More likely a bank mortgage raises your score because "they" assume your debts are ultimately secured by a callable asset.