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elbu

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how to pay down credit card debt so credit line is not decreased
We have high credit card debt and we now can pay off a significant amount of it. I have heard if you pay off a lot at once the credit card company will decrease the credit line. Have you experienced this? Would paying it down over several months be better than paying it down at one time?

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elbu

Assuming nothing else is going on:

I dont know why they would reduce your limit after you pay your bill.

I dont really know if paying it over time is better, most people have told me yes.  I have done it both ways with no ill effects.

If I were in your situation, I would probably pay it in large payments over a little time.  Not a lot, but spread it out a little.

The overall theme seems to be that they like to see you manage it correctly.  Rocketing up and then straight down could understandably make someone (a lender) nervous.

Either way, gettting that utilization down is going to make your numbers go up.

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my 2 cents...

I would also suggest that you pay it down over a short period of time (evenly paying the overall balance down over the various creditors - if applicable) and then just keep a watchful eye on the limits.  

I have had 2-3 lines of credit decreased (2 Amex cards and 1 Home Depot) card just due to the company's reviewing my credit and determining that it was too risky, that I wasn't paying enough towards the total balance due, etc., etc.  Amex has actually done this to me twice over the life of the cards even though I have always paid more than the min due and never been late (on anything).  Calling Amex to question the matter and return my limit to the prior amount has always gotten me to the same 2 options: 1) send us a bunch of docs, banking statements and tax stuff in order to verify your income (don't feel right doing this) and 2) "well, if you send us a payment of $xxx we'll restore the line".  Now, I did have to max out a card during my wife's 8 month of unemployment which is what I believe is driving the 'risky' status of my credit.  However, during this time, when I could not send in $xxx, the limit was reduced, causing the utilization to increase, thus decreasing my credit score, making me a 'riskier' person.  Quite the vicious cycle.  I have kept the Amex cards due to the fact that they are 'old' and this would contribute to my 'history of credit', however I'd love to cancel them and send Amex on a journey to much warmer climate...

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