Credit Limit Decrease - You Too?

[CUFINANCE]

BofA reduction from 6k to 1.5k due to account review.

[Anonymous]

This just happened to my fiance and his score went froma 675 to a 630!!! We are incredibly upset because we have been working hard to fix our credit and save money so we can buy a house in about 9 months.

My question is how are you supposed to pay the balance before the statement posts if you have no noticification of the decrease?

For some background this was his Best Buy card, which is the only card he has, and other than that his auto loan which was paid off in Oct is the only thing on his credit. He had a 1400 limit and only had 350 on the card. Once the holidays were over we were going to pay it down almost to nothing. Since learning more about credit in the last 6 months we havent used any more than 30% of the available credit and up until nov his DTC ratio was under 20% bc of the low balance on his car loan. On december 20th I went online just to make sure he hadnt made xmas charges that would require an immediate payment and got a horrible surprise, his limit was cut to only 400!!

I would have paid the majority of it off right then BUT because the predators decided to do this a week before christmas I could only pay a total of $150 off until our next pay check. The payment was credited on the 22nd and on the 24th they reported a balance of 366 meaning he was at 90 of his usage and his score dropped 40 points!!! I placed a dispute with the CB since i made immediate payment but idk if that will help. I fail to see how that does not categorize as unfair credit practices. Only thing I can say is best buy will no longer be getting our business. Id close the stpud account altogether but that would hurt his score more.

Any advice or suggestions would be greatly appreciated, should we even bother to contact best buy? If so what do we say?

[Anonymous]

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@notmyname wrote:

I believe the CSR gave you a "form comment" about a "form letter". Their job is to get off the phone within a set frame of time and I imagine they are having a lot of calls like yours.

Also .....go back and reread your Fico info and you will find that accounts over fifty percent are not "stellar".

NMN

I believe that,at least in kimg's case, you are wrong. The financial talking heads predicted this response from credit card issuers months ago. In order to show solvency and appear to be at less risk, or not have so much credit tied up,  they are looking at CC limits (especially higher ones)  and decreasing them to limits nearer the average high balances carried on the consumers card. 

This would appear to make it more  likely that kimg who charges 5k per month and pif would have her/his limits decreased than would "Joe Smo" who carries higher balances over from month to month.

[MidnightVoice]

Somewhere I read that there also new accounting rules which mean that CCCs have to state how much their POTENTIAL loss is, so they are reducing "excessive" and "unused" CLs for this reason as well.

And remember - any CC is UNSECURED debt (actual or potential).  And they are loaning you money for nothing (if you PIF).

[kimg727]

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@CUFINANCE wrote:

BofA reduction from 6k to 1.5k due to account review.

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OUCH!!

[kimg727]

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@Anonymous wrote:

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@notmyname wrote:

I believe the CSR gave you a "form comment" about a "form letter". Their job is to get off the phone within a set frame of time and I imagine they are having a lot of calls like yours.

Also .....go back and reread your Fico info and you will find that accounts over fifty percent are not "stellar".

NMN

I believe that,at least in kimg's case, you are wrong. The financial talking heads predicted this response from credit card issuers months ago. In order to show solvency and appear to be at less risk, or not have so much credit tied up,  they are looking at CC limits (especially higher ones)  and decreasing them to limits nearer the average high balances carried on the consumers card. 

This would appear to make it more  likely that kimg who charges 5k per month and pif would have her/his limits decreased than would "Joe Smo" who carries higher balances over from month to month.

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The last paragraph of what you said was, in so many words, was what the rep told me.  

However, the rep told me it was affecting ALL cards, not just the ones with high credit limits.   But when you stated this:

"In order to show solvency and appear to be at less risk, or not have so much credit tied up"

It summed his conversation up.  Basically, the bank as a whole, not just certain borrowers. If anything, he said cards are being cancelled.

[WhirledPeasPlease]

When my wee lil Amex got zapped I wasn't shocked, but seriously -- taking a 1k card to 500, yup, that's progress.  But again, it's Amex.  A month later I app'd for a Greenie, got it, called and asked about the exposure limit b/c of the very low limit on my Delta Gold.  The exposure?  5k.  I laughed and said something like, "Well that won't be an issue -- I'll never spend that much in one month because I'd have a hard time PIF."  The response of the CSR?  "Well, we can always arrange the 'pay over time' thing."  Huh?  I thought Amex didn't trust me to pay over time.

I understand decreasing risk, but the inconsistencies with Amex are mind boggling.

My scores are suffering w/ util around 30 and are shaking between 640 and 680.  At the same time the above Amex stuff was happening (scores at that time were 681,693 and 698), I got a CLI on my GEMB/OldNavy card from 500 to 800, an auto CLI on my Target Visa from 5k to 7k and most recently I opened a GEMB/Ikea card w/ a 2.8k limit.

I'll take my lumps, fair and square.  I'm trying to stay on good behavior and you can bet that I no longer use an Amex at Walmart most certainly use it at Starbucks.  When Amex comes out of its funk and my scores recover, I'll be asking to change the Delta to something Blue.  As for now -- it's all about FUTR!

[kimg727]

I read all that insaneness about American Express and consumer profiling.

AMAZING.

(That seems to be the word of the day for me).

And I really can't stand American Express.  I have the card because it's a good mix of credit for me and I've had it for 18 years now.

[Anonymous]

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@WhirledPeasPlease wrote:

When my wee lil Amex got zapped I wasn't shocked, but seriously -- taking a 1k card to 500, yup, that's progress.  But again, it's Amex.  A month later I app'd for a Greenie, got it, called and asked about the exposure limit b/c of the very low limit on my Delta Gold.  The exposure?  5k.  I laughed and said something like, "Well that won't be an issue -- I'll never spend that much in one month because I'd have a hard time PIF."  The response of the CSR?  "Well, we can always arrange the 'pay over time' thing."  Huh?  I thought Amex didn't trust me to pay over time.

I understand decreasing risk, but the inconsistencies with Amex are mind boggling.

My scores are suffering w/ util around 30 and are shaking between 640 and 680.  At the same time the above Amex stuff was happening (scores at that time were 681,693 and 698), I got a CLI on my GEMB/OldNavy card from 500 to 800, an auto CLI on my Target Visa from 5k to 7k and most recently I opened a GEMB/Ikea card w/ a 2.8k limit.

I'll take my lumps, fair and square.  I'm trying to stay on good behavior and you can bet that I no longer use an Amex at Walmart most certainly use it at Starbucks.  When Amex comes out of its funk and my scores recover, I'll be asking to change the Delta to something Blue.  As for now -- it's all about FUTR!

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Are you saying Starbucks is a safe place to use my Delta?  I hope so because that's the only place it will get used until they restore my limit.

[score_building]

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@Anonymous wrote:

Are you saying Starbucks is a safe place to use my Delta?  I hope so because that's the only place it will get used until they restore my limit.

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Yes, starbucks is reportedly on the 'amex approved' store list.  there has been a recent trend of card holders making their first purchase on a new amex at starbucks as a 'libation' to their risk models