Montana’s Change in Credit Limit is the Worst in the U.S.

Missoula, MT (KGVO-AM News) - Another financial blow for the state of Montana; this time when it comes to credit limits.

I spoke with Wallet Hub analyst Chip Lupo about the report just released this week that said Montana is in tough shape when it comes to our overall credit limit.

Montana Worst in the US in Credit Limits Being Reduced

“We're talking about the credit limit,” began Lupo. “Just to sum it up, the average person’s credit limit over this 12-month period from the second quarter of 2024 compared to 2023 was 15 percent lower than a year ago. So we're at about $4,800. That's the average, and it’s the worst in the U.S.”

Lupo said credit card companies have a great deal of power in setting your credit limit.

Credit Card Companies Have the Power to Lower Your Credit Limit

“Credit card companies have the right to automatically lower your credit limit if circumstances require it, or sometimes they don't even need a reason,” he said. “Sometimes your credit limit could just be lopped off; could be cut substantially by the credit card company for whatever reason. For instance, during COVID, credit card companies were cutting credit limits across the board to mitigate the risk of people overspending.”

Lupo said credit card companies keep a close eye on their risk when it comes to whether or not their customers will be able to pay their bills.

“Credit card companies report your income, and of course, your card activity,” he said. “Credit bureaus review your credit report when you apply, and if they see that people are opening up too many credit accounts, well, you risk being denied additional credit, or you could see your existing credit reduced.”

Lupo said Montana did receive some good news with the Wallet Hub report.

Lupo Said Montanans However Did receive Some Good Credit News

"If there is a silver lining to this, though, Montana traditionally has does very well in our credit card delinquency rate," he said. "They were second lowest in the country. So Montanans while, but when they're running up the debt, Montanans are doing a very good job of at least maintaining the payments. Even if they're just paying the minimum, they're keeping up those payments of delinquency rates are down."

Lupo said Montana residents would take an average of over five years to pay off their credit card debt.