Credit card limit reduction and interest increase

[Finance Dave]

If a car salesman tries to sell an elderly person a huge R.V. that they don't need and can't afford, for instance, there is Elder Law to protect the buyer. The dealer can be made to take the R.V. back and refund the money.

boont

These laws must not work. I'd say 25% of this country buys things they can't afford. What do you call an 84 month car loan? I call that you should buy a less expensive car you bonehead. What do you think has got us in the predicament we're in now? It's because too many people bought too much stuff that they cannot afford. And the laws you quote didn't stop it.

 

[TromboneAl]

BofA just decreased our limit from $50,000 to $25,000. We've never used more than a few thousand.

 

[Rustward]

It's going around. We were decreased from 54,500 to 27,500 between the March and April statements. Just noticed it on the statement. Don't recall getting any correspondence telling me this would happen.

So an additional item on the monthly reconciliation checklist will be to note the credit limit.

 

[freebird5825]

We keep our credit limits very low, in the $2-3K range. I just recently increased my credit limit to $9K on one card to accomodate an air/cruise booking. Ooohhh I'm gonna love that cashback check . As soon as we pay the rest of the balance (shore excursions) in late summer, I will again decrease it.
Call me paranoid, but I am uncomfortable with high credit limits. It's not that I don't trust the credit card companies in a case of ID theft or anything like that...

 

[CuppaJoe]

Literal credit contractions, scary, considering you all are probably great credit risks. Should be a great money maker for the banks in catching people unaware, over-limit fee, and pay up half of their balances now. One of my unused cards was cancelled; they gave me the courtesy of notifying me two months later.

 

[Frugality_of_Apathy]

My BofA card just went from $11,000 to $12,000.

MAybe they're just cutting it down to a level where you can't stick 5 years of college on a credit card and then default?

 

[Westernskies]

Mixed bag in the mail this AM:

1. Bof A increased my Visa credit line from 36K to 38K+
2. ATT Universal Mastercard canceled my 15 year old account for inactivity.
3. Capital One apparently enjoyed the rock I sent them; they sent me another [-]prepaid shipping label[/-] offer.

 

[hankster]

Bank of [-]A$$holes[/-] America just notified me of an interest rate increase from 6.9% to 14.15%. I was wondering if this is because we paid off all our debt except for a small balance on this credit card. Dave Ramsey says getting out of debt can lower one's FICO score and trigger rate increases. Oh well, we're not getting back into debt just to raise our FICO!

In retaliation, we shall no longer carry a balance but will pay off in full early each month, becoming what people in the CC biz call "freeloaders"

 

[Frugality_of_Apathy]

Dave Ramsey says getting out of debt can lower one's FICO score and trigger rate increases. Oh well, we're not getting back into debt just to raise our FICO!

Getting out of debt doesn't decrease your FICO, it's closing accounts. So the only time paying off debt is going to hurt you is if you don't regain credit from a place by paying the debt. Things like car loans and store payment plans where your line of credit is only as big as the amount you owe them and it shrinks and disappears as you pay it off.

BofA doesn't have to justify raising your rates due to FICO, it's just an idicator they sometimes use. They could jump your rate to 24% tomorrow, but it only matters if you carry a balance.

 

[mickeyd]

Since I am a credit card deadbeat, as many of you are, I have not received any notices of credit limit reduction or rate increase. Perhaps the CC companies have decided that we deadbeats who pay off monthly are actually a pretty good base to keep around. I did notice that Discover will soon (6/1/09) change their CashBack rules to make it more difficult to get larger kickbacks (i.e. WalMart, Sams, Costco etc will only receive .25%) on some transactions.

 

[Walt34]

Just get it in writing when you pay...they'll claim they never got the payment. And if you then cancel the card, get written proof of that too...or a year after that you'll get an annual fee charged. Happened to me, fortunately I had documented everything and they couldn't touch me.

Thanks for the "heads up" on that. We plan on closing the account when it's paid off, which we're doing early simply because neither one of us likes that hanging over our heads.

 

[freebird5825]

I just received a notice from one of my few credit cards of an increase in APR from 19% to 25%, with an accompanying increase in the default rate from 27% to 30%. This is a retail credit card from a store who sells Craftsman tools.
My response? I called them up and requested a reinstatement of the original terms based on a zero balance and excellent payment history.
Their response: Sorry, m'am, I can't do that.
Me: Close the account. I am opting out (required words per the notification from them).
Them: If we offered you free credit card monitoring for 6 months, would you reconsider?
Me: Nope. Close the account. I am opting out. And please send me written confirmation of the closing of the account.

Credit card issuers pile on new fees - USATODAY.com

 

[caninelover]

I got a notice on my Citi MC in Feb/March this year that they were jacking up the interest rate on my card from 15% to 25%. No problem, since I never carry a balance they can jack it up all they want. My credit limit was unchanged.

I did read somewhere recently though that Citi was considering adding an annual fee. I haven't been notified of such yet, but that would suck...that is my oldest credit line and I don't think I'd want to close it for that reason. Guess I'll have to wait and see...

 

[growing_older]

Got a notice from Chase today that my (mostly inactive) account with them will now have rates 16.99% plus Prime, or 25.99% plus prime if I miss any payments. I'm not using the card, but WOW. Borrowing money at low single digit rates and loaning it out at 19 to 30% must be a very lucrative business. I'll be super careful not to trigger these rates. Yikes.

 

[freebird5825]

cc terms change notice numero dos received 2 days ago...
PNC credit card, which used to be National City. I read every single line, twice, thrice...
Effective Oct 15, APR will be indexed to Prime rate plus 22.99%, or whatever based on payment history, credit scores, blah blah blah. Default rate will never fall below 28.99% yadda yadda yadda.
No annual fee changes nor change/removal of 4-3-2-1 cash back terms, both of which were a surprise. The 4% is for gas and automotive charges.

Default can include your bank not executing the payment transaction. So if you have automatic payments set up in your bank account, and something goes kerplunk ELECTRONICALLY (the cynic emerges ), hmmmmm guess what?
I smell a rat if your credit card issuer and your bank are one and the same. Mine are not.

Inactivity (1 year) can also trigger the default rate. Huh? Anybody else have this in their notices?

I'm going to retain it because I have a zero balance and make payments manually at least 2x per month, every other Friday, with email confirmation.
Nice try, PNC. You haven't shaken this "deadbeat" off yet.