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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 311078  
Subject: Re: CC Reform and Chase Date: 4/8/2010 8:31 PM
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Nothing risky done on her part. We paid off a 0% balance last year and just cycled our cell phone bill through it each month to keep it active. Her credit rating is even better than mine and mine isn't bad. They dropped it to $800. She never wanted the high limit they initially gave her, but once she got it, I figured not to mess with it because of utilization while we had the 0% balance.

Well, if you've checked her credit reports to be sure nothing strange has shown up on them, then you can probably chalk it up to low usage of the credit line, which made her account costly for the lender to keep at that credit level, for the return that they were getting. Costs to the lender aren't just the costs to print statements each month or to process your payment each month - there is also the capital that they have to hold against the open line of credit. Capital is a scarce resource for banks, so they are looking to deploy the capital that they have in the most profitable way. The bank is required to hold some capital reserves against the possibility that she would actually go out and charge up to the limit on the credit card. Since your wife has demonstrated that she isn't going to use her credit to a significant level, the lender would rather use the capital backing her line of credit for someone who is actually going to utilize a higher portion of their credit limit.

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