There’s also been stories about card issuers lowering people’s credit limits. But no one is talking about the real impact of that – for example, my husband and I got our tax refund and decided to pay down our cards since we’re trying to boost our credit scores for an upcoming planned refi. We put a large chunk of the refund money onto one card. Days later, we got a notice in the mail that the card issuer was reducing the card limit all the way down to where we have $66 credit available on that card. That was a tremendous reduction in the credit limit on that card – so significant that it made a big difference on our FICO score because it cut our available credit down by a third and really raised our debt to credit ratio…a few days later, we received another letter from the same card issuer saying that after a routine review of our credit score, our interest rates were being raised! But – if they hadn’t lowered our credit limit as soon as we’d made a big payment, our credit score would have gone UP not down and we wouldn’t have been in the bracket targeted for interest fee hikes.

Needless to say, we feel like we got hit with a double whammy and that in many ways, it feels like deliberate negative manipulation of our credit score on the part of the card issuer. Not to mention, if we’d known this particular card issuer was going to do this, we’d have used the money to pay on some other debt instead!