Cities where credit limits are decreasing the most

A decrease in your credit limit can limit your purchasing power, which can hurt your credit score. However, it may also help you spend less and have less credit card debt.

Credit limit decreases can also reflection either poor handling of credit or economic uncertainty, so large average decreases in a city might indicate that residents are in financial trouble.

To determine the states where residents’ credit limits decreased the most in the first quarter of  2024 as compared to the first quarter of 2023, WalletHub, a personal finance website, compared the average change in credit limit per resident in 100 of the largest U.S. cities over the past year:

1. Irving, California

2. Richmond, Virginia

3. Norfolk, Virginia

4. Buffalo, New York

5. Durham, North Carolina

6. Minneapolis, Minnesota

7. Chesapeake, Virginia

8. Fort Wayne, Indiana

9. Henderson, Nevada

10. Seattle, Washington

“When a credit card company lowers your credit limit, it’s a good idea to adjust your spending. Charging the same amount with a reduced credit limit will result in increased credit utilization, which can be detrimental to your credit score,” Cassandra Happe, WalletHub analyst, said in a statement. “Reducing your spending can help you keep the same credit utilization percentage. After at least six months of on-time payments, you can also consider asking your current creditors for a limit increase.”

Tips for managing credit card limit decreases from WalletHub include:

• Use multiple credit cards: Consider using multiple credit cards if you have them, as it can help you spread out your balances and maintain a low credit utilization ratio. You can also use different credit cards that each offer good rewards on a particular type of purchase or at a specific retailer to make the most of your card options. Most major retailers have their own credit cards, which are usually easy to obtain and often give you great rewards. You can also consider opening a new card to try to make up for a credit limit decrease, but that may not be a good idea if your limit decreased because of a drop in your credit score or missed payments.
• Pay your bill frequently: If you’d like to keep more of your credit limit available, consider paying your bill multiple times throughout the month. That way, you can maintain a lower balance and decrease the likelihood of your purchases being declined due to a maxed-out limit.
• Look into credit limit increases elsewhere: If one credit card company reduces your credit limit, you can contact your other credit cards’ issuers and ask if they can increase your credit limits. Having a good payment history and credit score may help you qualify for a credit limit increase, which can be beneficial in terms of improving your credit utilization. However, requesting a limit increase can cause a hard inquiry on your credit report, which can negatively impact your credit score. If you need the best possible score within the next few months, you may want to avoid requesting a higher limit. However, consistently paying your bills on time and using only a portion of your existing limit may result in an automatic credit limit increase, which doesn’t require a hard inquiry.
• Monitor your credit score: Unexpected changes in your credit score could indicate big issues with your credit history and financial habits. By monitoring your credit score, you can identify areas for improvement and make necessary changes. Checking your credit score and credit report can also help you pinpoint what might have led to a credit limit decrease.

See USAGov for information on how to understand, get, and improve your credit score.