"Our credit card company is punishing us for being responsible—and it’s infuriating." That’s the shocking reality many disciplined borrowers face when issuers slash their credit limits for not spending enough. But here’s where it gets controversial: Should you play their game or walk away? Let’s break it down.
The Problem:
A reader writes: "My wife and I have spotless credit—no debts, always paying cards in full, and a tiny 3-4% credit utilization ratio. We have $125,000 in total credit across six cards. But one issuer keeps cutting our limit, claiming we ‘don’t use the card enough.’ They won’t specify what ‘enough’ even means! Restoring the limit each time is a hassle, and our scores temporarily dip by ~10 points. Should we close this account (it’s not our oldest card)? Would that cause a lasting score drop? Could it trigger other issuers to reduce our limits too? The other cards have better perks, so we prefer using those."
The Expert Take (Liz Weston, CFP®):
1. Credit scores are fluid, not fixed. Closing one card might cause a minor, short-term score dip, but it’s not permanent. If you manage other cards well, your score will recover quickly.
2. Activity hacks: If you rarely use the card, set up a small recurring charge (like a streaming subscription) to keep it active.
3. Negotiate or leave: Ask the issuer to switch you to a card with better benefits—one you’d actually use. If they refuse? Cancel and tell them why. "Your policies don’t reward loyalty."
4. Domino-effect fear? Unlikely. With your strong credit profile, one closure won’t spook other issuers.
The Controversy:
Some argue you should never close a credit card, but Liz’s advice flips that dogma on its head: Why keep a card that stresses you out? Issuers profit from your spending (and interest if you carry a balance). If you’re not playing their game, they see you as ‘unprofitable.’ But is it fair to penalize fiscal responsibility?
Your Move:
- Option 1: Keep the card with minimal usage (annoying but safe).
- Option 2: Ditch it and watch your score bounce back.
- Nuclear option: "I’ll close all my accounts with you unless you stop this nonsense." (Risky, but some issuers cave.)
What would YOU do? Let’s debate in the comments: "Should credit card companies reward savers instead of spenders?"
P.S. For more money dilemmas:
- Can you deduct uninsured wildfire losses on taxes?
- Will your heirs inherit your timeshare’s fees?
- The hidden limits of Social Security spousal benefits
Liz Weston, Certified Financial Planner, answers reader questions at asklizweston.com. Disclaimer: This site may earn compensation for links clicked. By using it, you agree to our User Agreement and Privacy Policy.
