Are Banks Finished Robbing Credit Limits?

[creditwherecreditisdue]

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@DI wrote:
I don't understand how banks can continue to issue new cards while reducing the balances on current member.  Seem like they should take better care of its current members.

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Er... Because it is very good business as outlined by USMC above. I noted some months ago that taking the top $5K to $10K off all CC limits above $20K and turning them around as new $5K CL CC's would be a very smart move by the issuers. They haven't gotten around to that yet - they are still trying to get their exposure down. That has to be done and it is going to come from somebody.

[creditwherecreditisdue]

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iwantbettercredit wrote:
You never did answer that question of "What happens on Feb 22nd?"  You state to wait until after Feb 22nd.  Could you please elaborate some on that?

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Enforcement of the majority of the provisions of the Credit CARD Act of 2009.

[Anonymous]

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@DI wrote:
I don't understand how banks can continue to issue new cards while reducing the balances on current member.  Seem like they should take better care of its current members.

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Credit card issuers "make" money on:

1-transaction fees as a user uses the card

2-interest that accrues on the balance.

3-annual fees

there is also significant income generated by overlimit and late fees but I digress.

A user having a 10,000 credit limit where he never charges more then 2K on, does not carry a revolving balance and does not pay an annual fee makes the company no money.

A company does not exist other then to make money.

If I have a user with a 10K limit that rarely ever uses his card, never charges much on it a month, and never revolves the balance so it accrues interest, that person maybe a stand up guy in the real world, but from a business standpoint he is costing me money.

Yet that 10K limit is spoken for by him, I cannot just extend credit to everyone, I have to have something to back it up.

CC companies are not charities. They exist to make money.

[Karatz]

+1 to the previous post.

I wish they would provide a list of things that would keep them happy, like spend x, or pay x interest, something minimums....like they keep us guessing where we realy dnt know what they are happy with and what we can do so we keep in their grace.

[creditwherecreditisdue]

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@Karatz wrote:
+1 to the previous post.

I wish they would provide a list of things that would keep them happy, like spend x, or pay x interest, something minimums....like they keep us guessing where we realy dnt know what they are happy with and what we can do so we keep in their grace.

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You know what to do. Pay on-time, every time - Use you card - Keep your UTIL on the issuers card reasonable - Keep your overall UTIL reasonable. If economic forces lead to program and policy changes there is nothing you can do about it. All you can do is control the factors you can influence. That's it. If you do that you will be fine.

[GomerPyle]

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@Anonymous wrote:

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LOL.  It sure feels that way, doesn't it? 

The fact remains, though, that revolving lines of credit can be reduced, revoked or changed.  The CL is a standing "pre-approved" loan, essentially, which was approved based upon the both your financial capacity at the time as well as the banks.  If either change, they can and will adjust accordingly.  In recent months we have seen the result of having the banks' financial condition change.....the terms, rates, CL and even basis of account are being restructured, closed or otherwise "amended" as the notices say. 

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txjohn,

You always seem to have the best way of explaining just about anything I read on this forum. I appreciate your succinct and carefully written responses. Thanks, and keep it up. I always learn something when you respond.

[plasticman]

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@GomerPyle wrote:

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@Anonymous wrote:

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LOL.  It sure feels that way, doesn't it? 

The fact remains, though, that revolving lines of credit can be reduced, revoked or changed.  The CL is a standing "pre-approved" loan, essentially, which was approved based upon the both your financial capacity at the time as well as the banks.  If either change, they can and will adjust accordingly.  In recent months we have seen the result of having the banks' financial condition change.....the terms, rates, CL and even basis of account are being restructured, closed or otherwise "amended" as the notices say. 

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txjohn,

You always seem to have the best way of explaining just about anything I read on this forum. I appreciate your succinct and carefully written responses. Thanks, and keep it up. I always learn something when you respond.

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+1

[Anonymous]

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usmc58555 wrote: A user having a 10,000 credit limit where he never charges more then 2K on, does not carry a revolving balance and does not pay an annual fee makes the company no money.

A company does not exist other then to make money.

If I have a user with a 10K limit that rarely ever uses his card, never charges much on it a month, and never revolves the balance so it accrues interest, that person maybe a stand up guy in the real world, but from a business standpoint he is costing me money.

Yet that 10K limit is spoken for by him, I cannot just extend credit to everyone, I have to have something to back it up.

CC companies are not charities. They exist to make money.

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Banks make money from merchant fees when cardmembers use their cards even if they don't carry a balance or pay late or overlimit or annual fees. I would suggest if they want to make MORE money to perhaps cut down a bit on what they pay their CEOs. No one is going to convince me they aren't making more than enough money. They are RAISING credit card rates while CUTTING interest they pay out to savers. A double whammy to customers and a double windfall for the banks. Collect more, pay out less. Shame on them for their greed. The new laws should never have been delayed until Feb. But as one Senator put it, the banking lobby owns the Senate.

Message Edited by ExcellCR on 09-05-2009 12:05 AM

[Anonymous]

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@Anonymous wrote:


Banks make money from merchant fees when cardmembers use their cards even if they don't carry a balance or pay late or overlimit or annual fees. I would suggest if they want to make MORE money to perhaps cut down a bit on what they pay their CEOs. No one is going to convince me they aren't making more than enough money. They are RAISING credit card rates while CUTTING interest they pay out to savers. A double whammy to customers and a double windfall for the banks. Collect more, pay out less. Shame on them for their greed. The new laws should never have been delayed until Feb. But as one Senator put it, the banking lobby owns the Senate.

Message Edited by ExcellCR on 09-05-2009 12:05 AM

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You know, you could have included my whole post to keep it in context. 

When you go out to eat do you equally lambast the fast food establishment for charging $3.89 for a Coca Cola that costs them, well lets just say the cup costs more then the product.

You seem to be concerned about only one industry.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:


Banks make money from merchant fees when cardmembers use their cards even if they don't carry a balance or pay late or overlimit or annual fees. I would suggest if they want to make MORE money to perhaps cut down a bit on what they pay their CEOs. No one is going to convince me they aren't making more than enough money. They are RAISING credit card rates while CUTTING interest they pay out to savers. A double whammy to customers and a double windfall for the banks. Collect more, pay out less. Shame on them for their greed. The new laws should never have been delayed until Feb. But as one Senator put it, the banking lobby owns the Senate.

Message Edited by ExcellCR on 09-05-2009 12:05 AM

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You know, you could have included my whole post to keep it in context. 

When you go out to eat do you equally lambast the fast food establishment for charging $3.89 for a Coca Cola that costs them, well lets just say the cup costs more then the product.

You seem to be concerned about only one industry.

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Actually I was just trying to save space. What I quoted to comment on was not affected by the rest of the context. McDonalds has actually been running a promo for a large Coca Cola for a buck. But that's besides the point. I wouldn't be expressing my concerns anyway about other industries on a forum related to the banking industry.