MSNBC reported that a resident of San Diego has been said that his credit limit was reduced simply because he lives in California. Paul Smith recieved a letter from the issuing bank HSBC advising that, on the basis of information obtained from Equifax and due to the current economic environment, the credit limit for its General Motors credit card would be lowered from $ 7,000 to $ 1,400. Smith contacted Equifax and discovered that, because he carried a balance of $ 1,400 before the credit limit was reduced, now it was more than 51% of the available credit on the card, what caused its credit rating on the decline. Smith's credit report also showed that he had never been late with a payment and always pay more than the required minimum. Then Paul called HSBC and spoke with a representative of customer service who explained that his credit limit was cut due to the financial situation in California, and that similar measures were taken in Nevada, Florida and Arizona. When reached for comment, a spokesman for HSBC said: "As a standard business practice, HSBC's activities card adjusts credit criteria based on economic, market and other factors."
depending on your balance, lower credit limits can often lead to a lower credit rating, since the percentage of available credit that is used is an important factor in calculating your score. for this and many other reasons, it is a good idea to monitor your credit report for any significant changes. Keep in mind that it is best not to balance exceeds 50% of your available credit at some point . Check our reviews and comparison tables to learn more about credit cards and credit monitoring report.