My credit card with CitiBank just reduced my credit card limit without any warning.  Unfortunately, I found out when I tried to use the card.  I have never missed a payment and just a month ago I paid the entire account leaving a zero balance.  They told me they reviewed my credit report and decreased my credit limit because they thought I was a risk.  Can they do that?

I will say that this doesn’t surprise me at all.  Yes, they can do whatever they want to do with your account.  When you sign an application, you give them authorization to change the terms and conditions whenever and for whatever reason that they want.

The problem is that they don’t go out of their way to notify you.  Thus you might go over the limit on your card or you risk the embarrassment of being declined.  Welcome to the credit markets of 2008.  These card companies are crooked.

They create opportunities for consumers to pay penalty fees and pay higher interest rates.

What’s worse this could also lower a consumer’s credit score.  By lowering the credit limit, they affect the utilization ratio.

Watch your credit cards like a hawk!

Copyright © 2008 Prudent Money and Bob Brooks. All rights reserved.