Balance Chasing

Whenever credit cards are being discussed, the theme to The Godfather or Jaws should be playing in the background. Nothing seems to happen like it is supposed to. Balance chasing is just such an example. You reduce your credit card balance by faithfully paying your monthly bill and more. You see an ad for a trip to Jamaica. Airfare seems low. You need a vacation, and you have room on your credit card. Or...do you?

Balance chasing means that, as you pay your existing credit card balance down, the card issuer decreases the card's available credit. The card holder experiences a decrease in available credit rather than an increase by dutifully paying their balance down. The credit card company, to limit its risk, is limiting the amount of credit available on the card. Seems unfair, right?

Unfortunately, there is nothing you can do to prevent a credit card company from implementing this practice but pay off your credit or transfer the balance and move on.