Low Credit Limit
On average, a store credit card could have a credit limit as low as $1000. This makes it fairly easy for a consumer to cross the credit limit and hurt their credit store.
Lowering your credit limit can actually hurt your credit scores. The reason is that doing so increases your overall balance to limit ratio, or utilization rate. The lower your utilization rate, the less risk you represent to lenders. An increase in your utilization rate is a sign of risk because analysis has shown that consumers with high utilization are often using credit to spend more than they make and are more likely to default if they take on even more debt. Therefore, it hurts your credit scores.
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