CR Decrease need advise

[ineedcreditbad]

Guys,

Need some advise here. My credit line just got decreased 5K to 4K by my credit union bank because I was too close to my credit limit on my Cap One card. I have never been late on any of my payments and have always paid either in full or more than the minimum. What kind of an impact should I see on my other cards based on what my credit union has done?

Thanks

Ed

[BungalowMo]

Not sure of the impact, but I would call them for a recon.  And pay down some on the cap 1 asap!

[Anonymous]

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@ineedcreditbad wrote:

Guys,

Need some advise here. My credit line just got decreased 5K to 4K by my credit union bank because I was too close to my credit limit on my Cap One card. I have never been late on any of my payments and have always paid either in full or more than the minimum. What kind of an impact should I see on my other cards based on what my credit union has done?

Thanks

Ed

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Which CU?  I haven't seen too many instances where a CU took adverse action in response to your history with another creditor.

[ineedcreditbad]

Its Sunmark Credit Union.

Should I expect other banks to reduce my limit becuase of limit decrease from my CU?

Message Edited by ineedcreditbad on 10-12-2009 02:08 PM

[ineedcreditbad]

I did call them and got the usual bull***t that i need to make sure that my income to debt ratio is not high and that I dont carry too much balances.

Then he said that I have not been making large payments as I did before and I told him as I bought a new house I have been buying home stuff then he brought the Cap One balance that its close to the limit and on which I have a 0% apr till mid of next year.

I am just pissed at this crap that they would do something like that to a customer who is never late and pays on time.

What worries me if my other cards will follow suit which have very low balance and high limits.

Thanks

Ed

[creditwherecreditisdue]

Bauer Financial rates Sunmark FCU two stars. This is not good, By contrast PenFed and NFCU are rated four stars. CU's rating less that four stars are not recommended. Obviously Sunmark has financial issues (as reflected by the lower star rating) and it is being reflected in their policies. Sorry they are giving you problems. When you get your balances back under control you might want to consider diversifying yourself to include a larger, more financially stable national CU.

You might want to look at this report as well:

     http://www.bankrate.com/rates/safe-sound/memorandums-memos.aspx?cuid=1884

[ineedcreditbad]

Thanks for the info, I wasnt even aware of that, no wonder they screwed me.

Questions

With a decrease in my limit will this affect my other cards?

Should I payoff the balance, close card and join a higher CU

Thanks

Ed

[creditwherecreditisdue]

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ineedcreditbad wrote:

Thanks for the info, I wasnt even aware of that, no wonder they screwed me.

Questions

With a decrease in my limit will this affect my other cards?

Should I payoff the balance, close card and join a higher CU

Thanks

Ed

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If you carry balances having your CL reduced will most likely increase your UTIL % and decrease your FICO scores.

Increased UTIL, particularly high UTIL on individual cards or decreased scores can lead to AA from other issuers.

Therefore, you should get your balances down any way you can.

Closing this card is not a good idea, however. Do not close cards that do not have an AF without good reason. Reacting to AA is not a good reason.

Make sure you know exactly what your CBR's look like and what your score level is before considering app'ing for further credit. Make any changes/improvements necessary before proceeding.

[ineedcreditbad]

Thanks for the advice.

Ed

[Tons_of_Debt]

I definitely wouldn't close this card, even with an annual fee, unless the annual fee is ridiculously high (above $40).

While the AA is upsetting, it's important to look at your part in this and realize it is a direct result of your actions on other cards. Rather than reacting to the situation, respond by correcting the problem in the short term (i.e. paying down capital one) and long term (i.e. not going into debt you can't pay off in a month or two).

Generally, closing the card will only hurt yourself, by lowering your overall available credit, stopping growth on avg age, and burning a relationship bridge that you could use in the future. Given that this CU only has two stars, however, I'd start looking for another CU (with 4 stars) immediately. :-)