Credit Card Concerns

Dear Liz: My wife and I both maintain good credit scores, and we always pay off our credit cards in full and on time. We don’t have any outstanding loans or debts, and our credit utilization is quite low—probably around 3-4%. We have about $125,000 in total credit spread across six cards.

However, a certain credit company keeps lowering our credit limit whenever they feel we’re not using our card enough. They keep pushing us to “spend more,” but they never specify how much that should be. It’s really frustrating to have to reach out to them each time to restore my credit limit and, of course, my credit score takes a hit—about 10 points or so.

Now I’m wondering, if I were to close this account (it’s not my oldest card), would I risk a significant drop in my score? Should I consider setting a lower credit limit instead? If I do either, is there a chance that it might alert the other card issuers to do the same? I tend to use my other cards a lot since they offer better rewards.

Answer: It’s important to remember that your credit score isn’t set in stone. It fluctuates frequently, and even though closing a card could cause a minor dip, you can easily bounce back as long as you keep using your other accounts responsibly.

If you happen to have a month where you don’t use that card, maybe consider adding one or two small recurring expenses. This keeps some activity on the account. Plus, you could ask for a “product change” to a card that comes with benefits you would likely use more often.

Alternatively, you might feel that this company isn’t valuing your business enough. So, when you call to cancel, it’s worth pointing that out clearly.

If your credit score does drop notably, other issuers might take a look at your account, but don’t worry too much. Your score is quite good, and the impact from closing a single card should be minimal.