BOA no longer favored nation status

[Amoray42]

I am livid at BOA.  I have been a CC customer of BOA (formerly through MBNA) for over 22 years.  Just 2 weeks ago, BOA reduced my CL on my Premium Master Card by $27,000, with no notification whatsoever.  I happened to notice it while logged onto their website to schedule a payment.  In 22 years, I have never been late or missed a payment.  I use the card all the time, but I mostly pay the entire bill when due.  I have pretty good credit (EQ=793; Trans = 784; Esperian = 789 back on February 11th).  I called BOA credit department and they said it was a "routine check of exposure" that caused the CL reduction.  I still have plenty of credit available (over $100k on six CC's), but I am afraid that the loss of so much CL will result in a lowering of my FICO scores because of the percent utilization component of the score.  I don't want to end my 22 year relationship with BOA, but boy, am I mad!  Can I file a complaint based on lack of notification?  To date, I still have not received anything in writing advising me of these change in credit terms.

[Anonymous]

I understand your frustration.

However, if this card is PIF as you said, then the lowered CL should not affect your FICO unless you are carrying some sizeable balances on the other cc's.  With $100k CL existing, your percentage would be fine up to $7-9k, although that dollar amount will ding you potentially regardless of the percentage.

If this account is 22 years old, I'd probably keep it just for the age and history.  And, when BofA gets their house in order, they may return the CL down the road.  Right now many banks are forced to call in some markers just because they cannot meet the potential use of all the credit they have extended.

For example, let's say they have extended unused credit card CL's totaling $500 Billion, but can only manage to fund at any given time $400 Billion, then they must reduce exposure by $100 Billion.  This means lots of CL cuts not due to credit worthiness but funding ability.

While BofA, Citi and all the bigs "talk" that they are "healthy as a horse" that is to keep the public from panic and the deposits in place.  The last thing they want is people pulling deposits, investments and other forms of capital for the bank because this would accelerate the existing pinch and become a circular domino effect.

If they chased your balance and screwed your utilization....man that sucks.  But if you don't have a balance or much of one, I'd just be patient and remember, poker is not won in a single hand but over the course of the night....and this poker game is going to take the better part of year or so to play out the bad banking hands.

[Anonymous]

Welcome to the club!! I have spotless credit, scores in the 800's across all 3, and no revolving debt (PIF) BOA has been the only creditor to take AA against me. They chopped me from 20,800, to 10,500. I've been a cardholder since 1995 (converted from MBNA). When I called, I was told that I could not get the line re-instated, as I don't use enough of the credit line, and I have "high available credit limits" with other creditors. It's simply a sign of the times, as It's really not possible for me to look any better in their eyes FICO wise. The bank doesn't have the $$ to loan, so they are fishing for any excuse. I too, got no letter or notification. I found out by logging into the account.

I told the analyst, I will spend even less with the card now. I will use it to buy a coke at Mcdonalds, and that's about it. Meanwhile, AMEX gave me a CLI yesterday, so go figure.

[Amoray42]

txjohn, thanks for the explanation.  You are correct that all my CC's are regularly PIF each month, so hopefully the CL decrease will not negatively impact me.  I am trying for the 800 club, so I viewed this as a setback.  I must admit that my BOA CL was way more than I would ever have needed ($57.5k before the decrease...now down to $29k).  But I consider it an insult, since I have been an outstanding customer for all those years.  I think that I will try to replace some of the lost CL by asking one of my other CC's for a CLI.  I haven't ever requested a CLI from anyone.  They just kept giving me higher CL's over the years.  I was over 800, but had to buy a car two months ago, which dropped it some.  Hopefully I can get back over the majic 800 number.  Thanks for the great explanation.

[Amoray42]

Ismael109, thanks also for the response.  I got exactly the same explanation when I called BOA credit department as you did.  They said my highest utilization ever on the card was $12k, so I did not need the higher CL.  They admitted that I was a "perfect customer" with a perfect record of using their credit.  Also, I got "access checks" in the mail 3 weeks ago from BOA soliciting me to "pay off higher interest loans" by using some (or all) of my great available CL, which was listed as the original amount, not the decreased amount.  It is incredulous to me, but had I taken them up on the offer (which I never do), I probably would not have lost so much CL.  Or, the checks would not have cleared in time and they would have defaulted me.  I am really concerned about this lack of notification.  People could get in real trouble, if their timing was a little off.

[YoungEntrepeneur]

I don't know if you've noticed this but all lenders are cutting CL's without any notifications. Technically, they don't have to notify you when they're cutting CL's but they especially when you're carrying a large balance. That can put you over your limit and they can charge an OTL fee, raise your interest rate, and cancel any promos.

[Anonymous]

When Merrick Bank closed my account I got no warning.. to this day if I didn't have a credit monitoring service I would not know my MB Visa was closed.

[YoungEntrepeneur]

That's what happens to inactive accounts.

[Anonymous]

Yep, no promises with cc and revolving debt which is a "potential loan" always subject to denial, reduction or decline.

While credit history is important, we must remember that everybody is only as good as their "next deal" when it comes to money and loans with a financial institution.  What we perceive as bank loyalty for our length of time as customer or history is really misplaced trust.  This financial institution will not come to your aid or let you keep your credit or loan you money if you lose your job, get sick, divorced or other bad circumstance or really have a tough patch (if they know or find out) and need to use your credit for more than anything than convenience....your long trusted financial "friend" will drop you like a hot coal and not think twice. 

[Amoray42]

The last time we were at the mercy of an oppressive regime, the good people of Boston took matters into their own hands.  I acknowledge that credit granted from a bank is a privilege, not a right.  On the other hand, if someone has behaved appropriately, followed the bank's rules, one should be able to reasonably expect to be offered a level of trust by the credit granting institution.  However, in the current recessionary environment, we are at the mercy of the banks, who are the root cause of the economic downturn themselves.  Seems ironic.  So, as I am powerless, I have decided to "sock drawer" my BOA card for now.  I will pull it out every 90 days or so and exercise my second amendment rights (by purchasing a nice firearm or some ammo).  Then PIF when the bill comes.  Probably won't help, but it may annoy some people that deserve it.