The single best way to avoid a reduced credit limit is to always pay your credit card bills on time. Even if you must only make the minimum payment each month, do not let a month go by without making a payment, and be sure to make the payment by the due date. This applies to all your credit cards, no matter the balance.
A reduced credit limit on a credit card is a bad thing for a number of reasons, but primarily because it will affect your credit score. A portion of your credit score is based on your debt to credit limit ratio; this is the ratio of the amount of money you currently owe as compared to the amount of open credit you have. It is best to have a very low amount of debt compared to a relatively high amount of potential credit, and a reduced credit limit takes this ratio in the opposite direction.
Do not miss a single monthly payment; in fact, even making a single late payment can cause a credit card company to give you a reduced credit limit. This even applies to credit cards from different companies. For instance, imagine you have two credit cards; on one credit card you are current, but on the other, you miss a payment, causing your credit score to drop. The card on which you are current may then also reduce your credit limit, even though you have technically done nothing to them directly.
It may also benefit you to pay more than the minimum monthly payment every month to prevent a reduced credit limit. Even though you are technically only required to pay the minimum payment due, some credit card companies take this as an indication that you will have difficulty making payments in the future, and may give you a reduced credit limit. In addition, paying more than the minimum payment every month will help you to pay off your credit card debt much sooner.
In some cases, there is no way to avoid a reduced credit limit. A credit card company may reduce your credit limit without warning, sometimes right to the amount you owe, making it appear to the credit reporting agencies as if you have maxed out your credit card. You will receive a letter in the mail alerting you when your credit limit has been reduced, but in most cases, the only thing you can do is begin to pay down the debt. Some credit card companies will simultaneously raise your interest rate as well; you may try contacting them to ask them to increase your limit or lower the interest rate, but it can be difficult to get a credit card company to work with you unless you have outstanding credit.
