HSBC credit cards

[workinstiff]

Not sure if this is the right forum but I'll ask anyway. We've had a master card for years through HSBC with only a $2,000 line of credit. Never missed a payment, always pay more than the minimum, and in fact have paid it all off a few times over the years. Both my wife and I have outstanding credit scores.

Anyway, when HSBC started selling off recently out of the blue we got a letter from then saying that because we carry a high balance (at the time $1,800) they're reducing our credit to $1,805.
Do you think that was done across the board to everyone to somehow make their credit business more attractive to a buyer? I'm not sure how but I don't understand where this came from. And does that now affect our credit score? I understand CapitalOne just purchased their credit line.

Just wondering.

[Slug]

It's your utilization rate. 1800/2000 = 90% It makes you look like a credit risk. Many of us here have multiple cards that we never use so that when banks look at our credit in aggregate, our utilization overall is low. With only 1 card and such a low limit, you appear less credit worthy.

Also, they could easily do this again on your next payment so be prepared. If you pay off another $300, they could simply take it down to $1505. A friend is going through that right now.

Of course I would be remiss if I didn't mention that you should be paying that card off in full every month. Carrying a CC balance is considered among the worst kinds of debt.

[workinstiff]

thanks for the reply. it's not our only card, just the only hsbc one and the only one that sees us as a risk. I just didn't know how they suddenly came to that conclusion. Oh well, i'll just pay it off and not worry about it.

[LuckyRobin]

HSBC? Is this like a credit line from Best Buy or another electronics store? Because they are notorious for starting out with higher limits and then dropping it like a rock if you get anywhere near those limits. If it's a regular credit card they do do that periodically if the consider you a high risk. Also HSBC is one of those places that if there is even a blip on your credit report (say something like a missed dental bill you knew nothing about suddenly gets sent to collections) that will cancel you in a flash.

[JoshuaHeckathorn]

I'm sure it wasn't done across the board to all HSBC customers, but many credit issuers, including HSBC, have been looking at their credit card portfolios recently and cutting limits on accounts that appear more risky. You had a very high credit utilization ratio, so that's why you were targeted. And yes- it will hurt your FICO scores if your overall credit utilization ratio is negatively affected by the loss of available credit.

[JustBill]

It's hard to say with HSBC. We had about 20k limit with them, zero balance, rarely used the card as of late. About 2 years ago they lowered the CL to, get this, 1k. I don't know what I'd need to use a CC for which cost less than 1k. Ultra top tier FICO. Now, only charge 2-3 dollars each month just to annoy them (probably doesn't, just satisfies me) with statement generation, mailing, payment processing, etc.

[Eric80]

I have heard credit card companies have been reducing high risk customer periodically and maybe you got caught within that trap as they are done by computer, (eg you happened to have the high balance during there time they did there periodic check) its unfortunate because they may have not taken into account you have paid off your balance in full before and it not usually the case that you have a high utilization ratio but I cant think of any other reason but I am not an expert.

[danieldroga]

Originally Posted by workinstiff

thanks for the reply. it's not our only card, just the only hsbc one and the only one that sees us as a risk. I just didn't know how they suddenly came to that conclusion. Oh well, i'll just pay it off and not worry about it.

I think not worrying about it sounded better. If you have the money then just go on and pay for it and finally get rid of such payments. There are really companies that has this kind of tactic just to get what they want.

[Michael01]

HSBC credit cards have really gud benefits associated with them people should go for this .

[disneysteve]

Originally Posted by workinstiff

$2,000 line of credi

we carry a high balance (at the time $1,800

Originally Posted by Slug

It's your utilization rate. 1800/2000 = 90% It makes you look like a credit risk.

I agree with Slug. The problem is your utilization. Ideally, you should not carry any balance at all. You should pay the bill in full every month. Carrying a balance indicates that you are living beyond your means.

If you must carry a balance for some reason, you should keep it to no more than 30% of your credit line, so $600 with a $2,000 line. More than that lowers your credit score which makes you a higher risk customer.

[naomibatac]

I agree with some of the previous answers. Firs, it is better to have multiple cards so you can spread your spending among the different cards and maintain a low utility. Second, always pay the total amount due for every billing and not just the minimum amount due. Aside giving a sign that you are not able to pay the total amount, you are going to incur more interests and charges. Third, most credit card companies are reviewing their collection record to ensure that they have enough money to lend out and have a high collection level due to the current economic situation. If you want to learn more about how to manage your credit card and get help, try to visit creditcardshelplines.com. Hope I was able to help you with your concern.