Q: My American Express limit has been reduced and I have no idea why! What should I do?
A: The first thing you need to do is to find out why this happened.
Were you late with a payment? Did you fail to pay the entire balance off one month? (This is a requirement of most American Express cards.)
Did you “max out” your card? And has this been happening more and more frequently?
Don’t forget that most American Express cards are charge cards. This means that there is no pre-set credit limit, but you are required to pay the entire balance in full every month. (Exceptions to this rule include the Blue Cash and Delta Skymiles cards.)
If, based on your past card use, American Express feels you are charging more than you usually do, they will notify you that you cannot charge any more until you’ve made a payment. You will know this notification is legitimate because it will be made over the phone and confirmed by written correspondence.
If you are receiving these notices frequently, this will often spark Amex to reduce your credit limit. Though it may be an inconvenience for you, they are trying to protect their risk.
Of course, a one-time big event (like a wedding and a honeymoon), may result in more activity than usual. If this is the case, point this out to American Express. If you can demonstrate that recent expenses are related to those types of activities, they may well raise your credit limit.
Also, check your past statements to make sure the charges are yours. If you suspect that someone else may have used your card. Report any discrepancies or suspicious charges immediately to American Express. If they discover that there has been an error, or that you did not make a specific charge, they may raise your credit limit again.
Regardless of what explanation you have, once you have determined why your credit limit was reduced, ask what you can do to have it raised again.
You may need to pay the current balance off completely. Or you may even need to determine if you need to reverse a charge by returning merchandise, canceling a monthly subscription that you have charged to the card, or another way.
