Your experince (Post BK) re: Credit Lines.

[BxRcvor]

Perhaps, I'm going about this the wrong way as there may be other alternatives but, please, hear me out.

I have, pretty much closed all but two of my credit cards as part of the recovery process in re: my BK. And, while I would truly love to close the remaining two as well, I'm a bit apprehensive of doing so, as I know there are merchants/services etc. that only take credit cards for payment (ie. they won't even take Debit Cards... just credit cards). One of my two cards is connected with my checking account at Cap-One, and it's a very small line of credit so I probably won't cancel that. The other has a bit larger credit line. And I might consider paying that one off and closing it, if there were alternatives. But, right now, I'm keeping that one at (almost) max level and continuing to pay the monthly amounts. If I need something more significant, I'll pay off that much in order to have enough to cover it immediately, then going back to regular monthly payments.

Here's my question. Have you experienced (in re: your BK and its recovery) either paying off a credit card (or almost a complete pay off) only to have that cc company then (at a later point) cancel the card or reduce the credit line to only slightly above what you left on it, due to your BK/recovery status (i.e. low credit score, etc.)? I get the feeling that the card with the larger line is only letting me keep the credit line they have because they'll lower it after I pay it off, which does me no good (I need a certain credit line to cover certain things). I mean, if I could do it with debit cards as part of a checking account, I'd do that in a heartbeat. But, as stated previously, some merchants/services will only take credit cards and nothing else... no debit cards, no EFT service (Paypal/Zelle, etc). So, I do believe one should have at least one traditional credit card with a line enough to cover all the short term expenses you might have that can't be covered another way.

Anyone experience that and, if so, what did you do about it? If there are alternatives, I'm more than happy to listen (i.e. pre-paid credit cards, etc., although I don't know if there's one that will handle what I need for a credit line)...

[shipo]

During my post-BK era before the public record dropped off my reports, I approached my max credit limit on numerous occasions, and handily exceeded it once, and none of my credit card holders dropped my credit limit; quite the opposite actually. When I exceeded my CapOne limit by well over a thousand dollars I paid the card in full a few days later, and then two weeks after that they gave me a 50% bump in my credit limit.

Regarding living without credit cards; I did that for nearly seven years and quite honestly, the experience sucked. Why? I like to travel and most (all?) car rental companies refuse to rent to you if you only have a debit card, and even those who will rent to you with a debit card will not do so when the rental location is near a major airport. I also ran into this renting nicer hotel rooms; no credit card, no room, period.

By the time my bankruptcy fell off my reports I had something in the neighborhood of $15,000 in total credit across three cards, which was, and typically is more than I need (I've only exceeded that twice in total monthly charges, once on a European vacation and the second time when we bought a new home and had to outfit it before and shortly after moving in); fortunately once my credit reports were clear I applied for a few new cards and am currently sitting at just over $99,000 in total credit limit.

Circling back to your post, why are you wanting to cut back on your credit cards?

[justbroke]

As shipo says, so long as you can manage those cards by paying them off, it's no issue. However, I had an FNBO American Express which was converted to a VISA. It had a $5K limit. I didn't use it for a year and they summarily cancelled the account due to non-use. There are creditors that don't like credit just lingering and that is especially true when there's a major economic disaster such as COVID-19. I now know to tease my unused cards at least twice a year by charging something so that the creditor see usage.

[shipo]

As shipo says, so long as you can manage those cards by paying them off, it's no issue. However, I had an FNBO American Express which was converted to a VISA. It had a $5K limit. I didn't use it for a year and they summarily cancelled the account due to non-use. There are creditors that don't like credit just lingering and that is especially true when there's a major economic disaster such as COVID-19. I now know to tease my unused cards at least twice a year by charging something so that the creditor see usage.

Yeah, I tease the three cards I have in the proverbial sock drawer at least twice a year as well.