So guys, I've actually been seeing a lot of news from our Facebook group of users. Getting credit limit decreases on their account. What we're gon na do in today's video is talk about credit limits, the recession, why it may get lowered, why it may actually go higher and just explain to you guys exactly what is going on now, just as easy as it is to get a credit limit Increase you can also get a credit limit decrease by not doing anything at all. You know if I get hit with a credit limit decrease, I'm definitely gon na be like taken back.

I I might get a little offended if they did decrease the credit limit that I do have on my accounts, just because it's kind of like, like, like y-you, know like like why I'm definitely seeing that a lot right now with some of our users. It actually has not happened to me yet, but I do expect this to happen more often to other people holding credit cards so with the recent news of the pandemic and the recession and the stock market hit an all-time lows and then jump in all-time highs. In a single day, there's definitely a lot of crazy stuff going on right now, with in the economy and with in the world of personal finance. Now, when we're talking about credit limit decreases, I really don't think this is an uncommon thing, especially when people's credit score start dropping or maybe their their credit report.

Identity got stolen or maybe they have very irregular spending habits and the banks just don't know. What's going on with their accounts, credit limit decreases have happened forever. This is not a completely new thing. People often do get credit limit decreases, but this often happens to people who also have like weird stuff going on their account now.

This is very just an interesting topic to talk about when people have completely perfect. Like 850 credit scores, they've never had an issue paying off any of their cards, and then they get hit with a credit limit decrease. Now this actually isn't the first time this has happened back in 2008 during the financial crisis, a lot of credit cards. Consumers also got this.

They actually got a credit limit decrease on their account and the main reason why this happened was because the bank's wanted to minimize a risk that they had. So when we're getting money when we're getting a credit limit increase. This is really just a nota promise that we're gon na pay off this amount. We're gon na lend money, we're gon na borrow money, but we're also gon na be able to pay off that amount.

When individuals get a very high credit limit, it often puts a higher risk on these banks, especially during times of financial uncertainty. Here's the best example I can give just think about someone who has lost their job, who has lost almost everything. They can't pay their bills and real one of the easiest ways to borrow money instantly cash at hand without liquidating anything without applying for a temporary loan or going through SVA or or just trying to find money. Usually, the easiest way to get an access of money is through the credit cards that people have it's already in their wallet.

You already have access to it, you don't have to apply for anything and it's something. That's always been there now. The main issue with that is that people who often have a high credit limit and they lose their source of income they lose their job, will often resort to that credit card. But what ends up happening is when you put all your debt, when you put all that balance when you put all your purchases on your credit card, when you have no income and you drive up that debt, if it really goes into more extreme circumstances, and this Individual right here goes into bankruptcy and and they have to send it to collections, it's a lot more work for these credit card companies to retrieve that money that they may never get back.

So that's really the main reason why a lot of people right now may be seeing some credit limit decreases now, if you're an individual who does have a good relationship with these banks and they did decrease your credit limit significantly, where you actually start seeing a decrease In your credit score, maybe because your utilization goes up or your total balance just goes down and you're, just not seeing a positive reflection on your personal credit report. I always recommend you guys to call the banks and let them know usually when this happens. It's not a human just going through and clicking on every single profile. Like you get a ban, you you go down, maybe you only go down $ 1,000.

You go down $ 10,000 because I don't like the way you look it. That's not how it works. Usually the way this whole system works is just by an algorithm people don't have enough manpower to do that. It's a waste of time.

Usually an algorithm will do this. I don't know exactly how the algorithm works, but one of the things I do know is that they do make exceptions. So if you do see a credit limit decrease on your account because of a potential recession or whatever state we're in right now, if you do see a credit limit decrease, don't be afraid to call the banks and let them know so. I've seen other reports inside of our Facebook group, where people have had their credit limit decrease, but when they called them, they usually got a responsive.

Look. If you just pay off, your balance will restore it to where it was that that really right, there is a pretty good way for the banks to still allow you to keep that money and work off that money and also not be able to decrease your limits. All the way, my biggest tips to you - guys, not trying to get a credit limit decrease on your cards is make sure you are not that irregular. With your spending that you already do so people often forget these banks.

These credit card institutions, these these apps. They have so much data on us and when banks have this much information on us and they don't know the amount of money that's actually coming in, it really can be a very risky situation, especially for someone lending or borrowing money out. So you know the best example for this I think for me is like I used to have this one friend back in rugby practice, who used to always ask me for money. He used to always ask me like yo: can you spot me, 20 bucks B and I'd be like look bro like you.

Didn't pay me back the last time. I don't know if I want to do it this time and I think over time like when he was actually able to pay me back, and I lend him money, but sometimes you wouldn't be able to as someone who was lending money out to my friend in The back of my mind, because he didn't pay me back that one time for that small amount, maybe even five bucks it made me not want to lend him money again in the future. So I think really that's just a good way to put it. You know we always got a friend out there, who's asking to get a little bit of a spot, but you know they not the best at repaying that amount.

That's just what the situation reminds me of, so I would actually go ahead and decrease his credit limit ability of borrowing money for me subconsciously and say: look bro like I yeah you're, not you're, not letting any more money for me, but there are other people in My life, where, if they have a good history of being able to spot pay back money, give it back and do the process. That's kind of, like our internal personal human credit report, scale that we have amongst our peers. So, even if a person has like a perfect credit score and they've always paid me my money back if the economy is just going down, if we're about to be in a recession, if I'm not even sure, if I'm about to make income, then it really makes Me not want to be able to lend other people money out. Just because of I don't know what's gon na go on, I don't know you know if they want the money and then they run off.

I don't know if maybe I'll run off like who knows. What's happening, and I think this is really the mindset that a lot of these banks and financial institutions have right now, no one knows exactly what's gon na happen, no one, no one knows for sure. What's gon na happen, we're really in this state right now, this gray area this limbo, where people aren't sure if we're gon na recover, if we're just gon na, be in the worst financial like the great great depression like we really don't know how bad it may Get guys as the economy continues to decline, don't be surprised to see a credit limit decrease on your account. This is why I always say: diversify: diversify, diversify.

I should just have that in my Instagram bio just just diversify, because that's that's what I say so much diversify the cards on your account. So if you have ten cards, chances are. If you get a credit limit decrease on one of those cards. It's not gon na matter a whole lot but say you only have one credit card, that's your main daily driver and they decrease the credit limit on that by 80 %.

Say say that was it say you know they do that you're pretty much screwed. So biggest thing, I recommend you guys check out my other videos on how to get credit limit increases check out my other videos on how to get a proof for any credit card out on the market. Make sure you guys diversify, stay safe out. There stay smart and I hope I see you guys the next one, Oh drop a like if you guys haven't already please.

Thank you. Alright I'll see you guys the next one peace you.