Letters from Credit Cards-any advise?

[MickeyMousse]

I must vent!
With the current economy I am sure that I am not the only person who has received letters about their credit card limits being lowered. However, this practice is making my credit score go haywire and the domino affect has occurred.
I am never late with a payment, always pay more than the minimum, no charge disputes, no bankruptcy, etc... When the credit card industry got in trouble I noticed my credit limits being lowered within maybe a thousand or so of my current balance. We're talking a HUGE decrease in credit line, lets say from
25k (which I always said was nuts) to 4k. This action in decreasing my line, because there is NO comment on the credit report stating the reason why it has been decreased, makes it LOOK as though I have many high balances compared to credit limits that were originally much higher than what is now being reflected. They don't see that originally I had a 25k line on a 3k balance that now has a 4k line!

Any suggestions on how I can handle this? It is not fair that because the companies reduced my credit because of their troubles that it is now reflecting poorly on me! I believe that there should be a notation when they do this that is reflected on the credit report that they lowered the credit lines not due to anything that I did.

Any suggestions would be appreciated.

[sonkist32]

go to your local credit union..enough said

[gerald72]

I've read where credit card companies have lowered the credit limit to BELOW the balance carried, and charged overlimit fees.

[MickeyMousse]

I've read where credit card companies have lowered the credit limit to BELOW the balance carried, and charged overlimit fees.

I've read about that too...that MUST be illegal.

How is my local credit union going to help? My bank is a credit union. More info, please?

Thanks!

[Ian]

The only thing you can do is try to find someone who will give you a reasonable credit limit and then transfer your balance.

[gueli]

The only thing you can do is try to find someone who will give you a reasonable credit limit and then transfer your balance.

Like a Disney card ???

[I LoveJack]

You could call and try talking to the cc company first. Explain that if they feel the need to lower your limit that you feel your loyal business might be better served else where. If you don't like what they say, then start looking for another company with a good promo for a transfer and then canel the card out. My husband did this this past couple of months. One wouldn't budge so he transfered the balance and canceled the card. The other one gave him his full limit back after he explained that he had just canceled one card because of this. You never know until you ask.

[Skippy]

Like a Disney card ???

To Chase? They were nice enough to lower my HELOC to the even amount above what I owed. (lowering my available line over $30,000.)

Then when I paid off the remaining balance - they suspended my account. It's still there as "available" on my credit report but I can't borrow against it.

[Camping Mom]

I too pay on time and have a good record with the credit card company, but they raised my interest rates because they "need to get the money back." NOOOOO, it was because they made bad investments and lost money and now are jacking up rates to make more money. Both of my cards which I rarely use have been suspended and all I can do is pay them off. Thank goodness my husband and I are on a plan. We are paying off our car early and taking that money to pay something else off and then we take down the credit cards. It is a huge rip off business!!!!!!

[Mousefever]

I think some credit unions are better than others. We bank with Coors Credit Union, which is now a community credit union. We have never had a problem with any of our accounts, and we have checking, savings, overdraft, auto loan, visa and home equity line. They will always work with us and we always talk to a local person.

One time I paid something online with an electric check, then I accidently wrote the same check (or the same check number) for some Chinese food. I called the credit union and they took care of it without any fees.

If your credit union is not that responsive, I'd suggest shopping around for a new one. There are good ones out there.

Amy

[conorsmom2000]

We've been through both types of scenario's - the hijacked interest rate and the credit limit being cut. Same as others, we pay on time, pay more than minimum, never late, etc. But, out of the blue, Chase bumped my interest rate from 14 % to 27.99%!!! They say they sent me an opt out letter (where I could choose to close the account) but if they did, I never saw it. Based on advice I was given, I filed a complaint with the O.C.C. (Office of the Comptroller of the Currency, who oversees national banks). They saw in my favor and my rate was lowered back to the original interest rate and the account closed. Chase could never give me a reason as to why they did this. I did find out from my research that I definitely wasn't alone - it was happeing a lot, with certain banks being the biggest offenders. I ended up getting involved with an advocacy group and my story was one of many they presented before Congress last year.

Now it's my husband's turn. At one point last year he transfered two balances over to a Citibank card which was offering a 0% interest rate for 18 months. At the time, they gave him a $9,000 credit limit, which we thought was higher than we needed, but no big deal. A few months in, they randomly cut his credit limit by over $3,500, leaving him with $38 available. Now, every time he pays off $500 or $1,000, they cut the available credit limit so there is only $40 or so available. At this point, it's like a carrot and stick game. And, as said before, it's killing his credit score because Citibank makes sure the card is constantly maxed out, so that looks terrible for him. We are just beginning our fight with this situation - not that Mike wants to keep the card, but I can't stand what they are doing to his credit....and we don't understand why they are doing this in the first place? Though, with the legislation going into effective in a few months to protect credit card consumers, I'm sure the credit card companies will be scrambling to do whatever damage they can.

[Stickey]

Credit card companies are frequently lowering account lines. Usually, this action is not based on a negative payment history by the cardholder.

Credit scores will take a hit if more than 30% of a line is utilized. The higher percentage of useage, the greater the damage. Also, cancelling an established credit card account will also negatively impact your credit scores.

Options:
1) Contact the credit card company and request a higher line. It may be necessary to state that you will close the account if your request is not met.
2) Transfer balance to another account. Beware of the 30% rule.
3) Research other credit card options including credit unions and local banks.

Unfortunately, the current legislation will produce mixed results. Some questionable practices will be eliminated, however banks will be increasing fees and reducing account lines to compensate for areas of lost revenue.

[Dakota Rose]

I just keep telling myself that in the end it's the credit card companies who are going to get the boot. Pretty soon we'll all get sick of these games, pay off all the cards and go back to using cash. That's my plan at least.

Anyhow, check out this story. My FIL rec'd a preapproved offer in the mail. He completed the app online, was approved and rec'd the new cards within 3 days. On day 4, they booked a vacation using the card. On day 9 he rec'd a letter saying they made a mistake, he shouldn't have rec'd the card and the balance was now due and payable as they were canceling the account.

Unreal.

[thrillme]

I got the same thing. It was on a credit card that sold out to a bank that I don't like. Instead of canceling the card I just quit using it. They dropped the limits because I don't use it a lot. I know I can call the bank and get it reestablished but...I don't really care. For the most part I'm never going to use what I had anyway.

Your credit rating can get a "ding" for you canceling cards which is stupid.

The credit industry does NOTHING to reward those who pay their bills on time or off completely.

[MickeyMousse]

Reducing my credit line is ok, but when it it reduced to something that is so close to my balance it makes me look like a poor credit risk. Notations on credit reports that state that the bank CHOSE to reduce NOT due to payment history or problems by the credit card holder is a must.
I would like to say thanks to all of you for sharing your stories and advice. I wrote to my local congressman (amongst so many others) and received a call asking me to come in and speak with him personally about my story. I am hoping that this is the beginning of the road to redemption for ALL OF US.

[Gooftroop5]

I had this happen with 2 of my cards one I didn't even carry a balance on only use at christmas time & pay off as soon as I get the bill. The other I was/am trying to pay off. Because I wasn't using it they dropped my credit limit. Now in order to stop them from doing this I try to charge something small & pay the extra which really isn't getting me anywhere.

Even better was other credit cards were raising my credit limit. These too I wasn't using trying to pay off & not using & no where near being maxed out.

Love how you try to pay off your credit cards they penalize you anyways. Like the others here I pay my bills on time & try to pay extra.