How I slashed my own credit limit — reader mistake story

Dec 13, 2019

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Today, I want to share a story from TPG reader Ben, who made a hasty decision after being approved for a new card:

Last year, I saw an increased welcome bonus offer (no longer available) for the Platinum Delta SkyMiles® Credit Card from American Express. I already had the Gold Delta SkyMiles® Credit Card from American Express, but I was flying Delta more frequently, so I decided to apply for the Platinum version and cancel my Gold card. I was instantly approved for the Delta Platinum card, and because I never had an issue with credit limits in the past, I proceeded to cancel my Gold card without checking the credit limit on my new account.

To my surprise, I later discovered that Amex had given me only a $5,000 credit limit on my new Delta Platinum card. Had I noticed the lower limit earlier, I could have moved some of my existing credit line from my Delta Gold card to the new Platinum [Delta] card before canceling the card.

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A low credit limit can inconvenience you not only by capping your spending ability, but also by increasing your credit utilization ratio (an important factor in determining your credit score). You may be able to increase credit limits simply by asking, but you should also look for opportunities to maintain existing credit lines when you close an account — the lower your cumulative credit limit, the more important it is to preserve what you have. Card issuers are often willing to transfer at least some of your credit from one account to another. This requires a phone call in most cases, but American Express facilitates the process by allowing you to shift credit between accounts online.

Even if your credit limit isn’t a concern, don’t cancel a card without considering the broader impact on your credit and finances, rewards and upcoming travel plans. Closing an account may unwittingly cost you benefits that you rely on (like lounge access or the ability to transfer points to travel partners), or jeopardize your rewards by making them susceptible to expiration policies. Looking at the big picture will help you identify adverse affects of closing your account that don’t pertain to the account itself. If you find any, then you can re-evaluate your decision and consider alternatives like downgrading your card.

Related: What to do before closing a credit card

I appreciate this story, and I hope it can help other readers avoid making the same mistake. In appreciation for sharing this experience (and for allowing us to post it online), I’m sending Ben a gift card to enjoy on future travels, and I’d like to do the same for you. Please email your own travel mistake stories to info@thepointsguy.com, and put “Reader Mistake Story” in the subject line. Tell us how things went wrong, and (where applicable) how you made them right. Offer any wisdom you gained from the experience, and explain what the rest of us can do to avoid the same pitfalls.

Feel free to also submit your best travel success stories. If your story is published in either case, I’ll send you a gift to jump-start your next adventure. Due to the volume of submissions, we can’t respond to each story individually, but we’ll be in touch if yours is selected. I look forward to hearing from you, and until then, I wish you a safe and mistake-free journey!

Featured photo by Wyatt Smith/The Points Guy.

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