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My wife and I are having problems budgeting with our credit cards. We are trying to use our debit card, but while we can focus for a short period we have problems getting the discipline to keep the credit card from growing, and we have been getting surprised in the last couple of months.

We would like to reduce our credit available to something like $500 (from 9K a piece). I know this will have an impact to our credit used to available, but are there any other reasons to not do this. Will the credit card companies not allow such a reduction?

Aside from the fact that could use better discipline, any budgeting tips are appreciated. We use mint for tracking, but can never get close to our savings goals.

Most important, what are my rights? Can I set my credit limit as low as I want? I imagine this would all be in my card member agreement, right?

Update: Chase won't let me get the balance below 5K. It looks like my only option is to cancel the card.

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    I applaud you for your efforts to get your finances under control. Welcome to the site!
    – ChrisInEdmonton
    Oct 21, 2011 at 14:31
  • My credit card company keeps increasing my credit limit. But I continue to rise to the challenge.
    – Jay
    Jan 6, 2015 at 19:45
  • you could instead of reducing credit lines on the cards cut up one or two of the physical cards and reserve them for only "online" purchases. This hopefully would help you reduce spending on that card without taking a hit to your credit score.
    – WetlabStudent
    Jan 7, 2015 at 0:10

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Aside from an annual fee, if any, the card issuer makes money 2 ways, the transaction fee, about 1.5%-2% charged to the merchant, and interest from you if you leave a balance month to month. Obviously, the bank has some cost in processing statements and maintaining your account. If up front you are saying you will not have any chance of providing a certain profit level, they may have no interest in your business. (As you updated.) Other card issuers (almost surely with fees) might.

Put the cards on ice. A bag of water in freezer. Don't be so hasty that you ding your report this way. By trashing the history as well as utilization, you may impact your score enough to do some harm if you actually need credit in the near future. I know this is a game with the credit agencies, a "how good a borrower am I" game, but it can really impact your bottom line if you don't play along.

In reply to Michael's comment 1/5/15, if I have one card and am budgeted for $1000/mo in spending, in order to keep utilization down to less than 20%, I'd need a line of more than $5000. Even if I ignore utilization, my January spending is $1000, but the bill is cut on the 31st and not due till Feb 25th. So a line of nearly $2000 is required unless you wish to make mid cycle payments on an ongoing basis.

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    excellent thoughts. i'm inclined to agree. I just think credit cards are weapons of mass destruction against a budget plan. They show up and blow up the budget with a big bill.
    – bonhoffer
    Oct 21, 2011 at 13:56
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    Much thanks and welcome to Stack Exchange. In the future (we hope you stay around, lots to learn) you might wait a bit longer to choose best response. Everyone posts on their own schedule and the group here is full of experience and great advice. A full day lets the regular posters have a shot at helping.
    – JTP - Apologise to Monica ♦
    Oct 21, 2011 at 14:08
  • assuming you can reduce your limit, is there any reason to not do so for budgeting purposes? i.e. say you don't want to spend more than $X/month (as that's what you can pay off in full) why not set your limit to $X?
    – user12515
    Jan 6, 2015 at 1:42
  • @Michael - I added to my response above in reply.
    – JTP - Apologise to Monica ♦
    Jan 6, 2015 at 2:53
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I agree with JoeTaxpayer that you will be better off in the end if you can just not use your card you are better off in the long run. That said if you are determined to get a card you can control go to a credit union or local bank. Most of them will give you the credit limit you want. This may provide you with a card that you can make use of but know that you can not go wild. The down side is most of these will not be reward cards but my local credit union gave me a 7% card where my Chase card is at 18%(was 5% before the changes to credit card regulations).

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    +1 for credit union. I forget how they are often friendlier to consumers than the big banks.
    – JTP - Apologise to Monica ♦
    Oct 21, 2011 at 17:49
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$500 should not have a massive impact on your credit. Why not at the beginning of each month buy a $500 prepaid Visa instead of using your credit card? That way you set a hard limit, but you still have the option of using credit in an emergency.

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