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The CLD debate: a rebuttal to the banks

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Anonymous
Not applicable

The CLD debate: a rebuttal to the banks

In rebuttal to the explanations being given by banks and economists for recent AA and CLD:  


Regardless of the reasoning for CLD, the consumer is the ultimate judge, not the lenders.  BoA and others who tighten credit lines take the chance of pushing prime customers into the open arms of those institutions that did not make poor credit decisions.

 

BoA's bad decisions are not my problem, directly, though I may feel the indirect results.  However, in the end I have the ability to move to a CU or elsewhere that is not tightening credit for those of us who are in a position to handle it.

 

All the charts in the world cannot force me to take responsibility for BoA making bad decisions past, and now questionable decisions present.  Because they stand a real chance of pushing some very prime customers, like me, away.

 

Through personal and business deposits, securities and loans, I have had 7 figure amounts with BoA through the past 4 years.  Much of that is now moved away because I have judged their credit to be subprime for my business.  :smileyhappy:

 

If CITI and BoA or others have taken losses in the past 5 years, I am part of the average that has kept that percentage from being even higher....meaning the profits of my accounts has offset the losses of others.  As such, these lenders will soon learn that I have the final vote for my business.

 

USMC has a sig line "credit is not a right, it is a business transaction."  I add to that:  BoA does not have a right to my money, my borrowing or my investments.  While they have the right to make policy which affects all account holders adversely, I also have the right to say no, I don't accept this, I will not be an "enabler" and I will vote with my money and loans elsewhere.

 

BoA has no problem affecting me adversely for their overall objectives.  Why then is it wrong for me to make decisions that may affect them adversely, but help achieve my overall objectives.

 

There is a an old saying:  "Here's to you, here's to me.  May we never disagree!  But if we do, to hell with you, and here's to me!"

 

Seems befitting, no?

Message Edited by txjohn on 04-18-2009 11:50 AM
Message 1 of 27
26 REPLIES 26
Anonymous
Not applicable

Re: The CLD debate

I second that.  Got axed $12k to $6k.  Have fairly large deposits and retirment accounts.  They are finding new homes.
Message 2 of 27
Anonymous
Not applicable

Re: The CLD debate

I'm going with NFCU and Alliant.
Message 3 of 27
Anonymous
Not applicable

Re: The CLD debate

big banks always seemed to intimidate me, like I had to be good enough to give them my money or be able to use them.  I am finding the credit union very comfortable and easy going. 
Message 4 of 27
ocheosa
Valued Contributor

Re: The CLD debate

Great post OP!

 

As to BOA -- I went from 20K to 10K yesterday....but luckily I happen to have quite a few accounts elsewhereSmiley Very Happy

 

I called the credit dept to find out what happened?? The analyst wanted to know why I have balances on my USBank and Citi accounts...I thought to myself, "what nerve". I happily told him I was offered 2.99 & 3.99% Life of Loan Balance transfers that I was happy to take advantage of. He didn't like that much and I didn't care!

 

So here's to Bank of America! Cheers! The card is now officially in the Sock Drawer - For Life!

 

Good luck to all as we make our way through this banking nightmare....

Message Edited by ocheosa on 04-18-2009 09:46 AM
[4/23] Scores 8/9: 700-800s. Util: 1%. Inq/12: EQ 0, EX 5, TU 1. AoOA=14.8y, AoYA=9m.
TCL $618K: Personal $512K, Business $106K.
Message 5 of 27
Anonymous
Not applicable

Re: The CLD debate

You mean you actually used your credit cards????  (a look of shock and horror on my face)

 

So, were your other balances high utilization or out of the norm in spending patters?

Message 6 of 27
jaybird201
Established Contributor

Re: The CLD debate: a rebuttal to the banks

there isn't really a debate going on...debates take two people and really this "debate" is consumers complaining about decreased credit lines. i feel like there are two groups of people that are getting credit limit decreases: those who deserve to have their credit lines cut due to poor management of credit, and those who, unfortunately, are getting caught in the crossfire. i believe the former group is significantly larger than the latter.

 

and even if you're in the latter group, ask yourself this: were you really using that credit they took away from you anyway?

 

i'm a young guy, going back to school, and i'll be making good use of my credit cards over the next few years. i have an amex, discover, and a bofa card that all had their credit lines slashed. overall, my credit lines were slashed about 40% from $20,000 to $12,000. did this hurt my credit score? yes. a lot? no. can i still pay my bills, put food on my table, and pay all of my necessary expenses? yes.

 

i can see why some would make the argument that a few bad apples are ruining credit for the rest of us. i would 100% agree with you. but honestly, if that's super-duper upsetting to you, you must live a really priveleged life for that to be your biggest problem. there are bigger things in the world to worry about besides lower credit lines and a small hit to your fico score.

Message 7 of 27
Anonymous
Not applicable

Re: The CLD debate: a rebuttal to the banks


@jaybird201 wrote:

there isn't really a debate going on...debates take two people and really this "debate" is consumers complaining about decreased credit lines. i feel like there are two groups of people that are getting credit limit decreases: those who deserve to have their credit lines cut due to poor management of credit, and those who, unfortunately, are getting caught in the crossfire. i believe the former group is significantly larger than the latter.

 

and even if you're in the latter group, ask yourself this: were you really using that credit they took away from you anyway?

 

i'm a young guy, going back to school, and i'll be making good use of my credit cards over the next few years. i have an amex, discover, and a bofa card that all had their credit lines slashed. overall, my credit lines were slashed about 40% from $20,000 to $12,000. did this hurt my credit score? yes. a lot? no. can i still pay my bills, put food on my table, and pay all of my necessary expenses? yes.

 

i can see why some would make the argument that a few bad apples are ruining credit for the rest of us. i would 100% agree with you. but honestly, if that's super-duper upsetting to you, you must live a really priveleged life for that to be your biggest problem. there are bigger things in the world to worry about besides lower credit lines and a small hit to your fico score.


Fair enough Jaybird - but did you read my whole post?  There really has been a debate.  The debate has been:

 

1.  Some people say "those *$&(#*&$ banks" and are ticked off

2.  Some people say "there is a legitimate reason, we just have to accept it

3.  Some people "deserved" the AA actions, meaning their credit reflected adversely

4.  Some people were affected by no particular issue of adverse credit, just change in policy

 

So the debate is this:  should people get mad, accept the policy as-is and sit tight or do neither.

 

My post really spoke of the nature of free markets and supply/demand.  The banks say there is less supply, so to meet demand the cost must go up and the ration must go down.

 

However, this is not universally true.  And as a consumer, whether I "used" the CL's is subjective.  And if I want a $25k CL then I am free to shop and do business with a company that can provide that service.  If my previous bank is no longer in that businesss or no longer can provide that level of service, then I SHOULD shop the market and find what I want.

 

To shop and force competition and leveling is what a healthy free market is all about.  Sitting tight is not.  All the reasons in the world for why they act or do as they do is not a reason that I should not potentially diversify or move.

 

If the bank cannot provide the level of service that they once didn, meaning that they have changed while I have not, then why should I not change also?  For every action there is an equal and opposite reaction.

 

If I want $25k and BoA or Citi says no, but another bank or CU says yes and can provide a level of service desirable to me......I am compelled to reward that organization with my business.  By not changing on my part in reaction to the changes of the banks, I give them no reason to do otherwise or to improve.  Competition is good....now they shall and must compete.  It is my duty to the free market and my own interests.

 

Also, I do not agree with your theory "that the former" is a larger group.  CCC's are in a panic with a 8-10% default rate.  This means 92% not in default.  92% by my calculations is the larger group.  Therefore, a "few" bad apples does in deed spoil the barrel.

Message Edited by txjohn on 04-18-2009 12:26 PM
Message 8 of 27
jaybird201
Established Contributor

Re: The CLD debate: a rebuttal to the banks

you sort of avoided the main issue my post addressed. i agree with you that if a company isn't "serving" you well by giving you enormous credit lines, you have every right to find another company that will give you a monster credit line.

 

what i'm saying, is that many people who had their lines cut probably weren't using them anyway. and to clarify my definition of "using", here's an example. i have a $10,000 credit line on my bofa card. i put about $1,000 per month on it, and twice have gone on vacation and have put as much as $3,000 on my card in a month. i really don't need a $10,000 credit line. i definitely think bofa has the right to cut my credit line to $5,000. and if i want an extra $5,000 that i'd never ever use except for lowering my utilization and improving my fico score by 5 points, i can just find another credit card company to give me a more generous line.

 

i'd like to point out however, that credit card companies are businesses. they benefit from people using their cards. if they're cutting your credit line, it's probably got to do with the fact that your either mismanaging your credit or not using their credit line (it's costly for them to give out huge lines that go unused).

Message 9 of 27
Anonymous
Not applicable

Re: The CLD debate: a rebuttal to the banks


@jaybird201 wrote:

you sort of avoided the main issue my post addressed. i agree with you that if a company isn't "serving" you well by giving you enormous credit lines, you have every right to find another company that will give you a monster credit line.

 

what i'm saying, is that many people who had their lines cut probably weren't using them anyway. and to clarify my definition of "using", here's an example. i have a $10,000 credit line on my bofa card. i put about $1,000 per month on it, and twice have gone on vacation and have put as much as $3,000 on my card in a month. i really don't need a $10,000 credit line. i definitely think bofa has the right to cut my credit line to $5,000. and if i want an extra $5,000 that i'd never ever use except for lowering my utilization and improving my fico score by 5 points, i can just find another credit card company to give me a more generous line.

 

i'd like to point out however, that credit card companies are businesses. they benefit from people using their cards. if they're cutting your credit line, it's probably got to do with the fact that your either mismanaging your credit or not using their credit line (it's costly for them to give out huge lines that go unused).


 

I absolutely agree with you Jaybird....BoA has every right to increase or decrease CL's in accordance with their economic goals.

 

I only rebutted that "there is no debate" because I was addressing those who have argued that BoA should or shouldn't do this.  Which my post never stated they should not, only that their actions will have reactions....including the potential loss of prime customers to other organizations not facing the "crunch" BoA is facing.  The free market.

 

And I do understand the principal of "not using" but still say this is subjective.  Afterall, if I use $1000, is the CL I should have?  If I do, that is frowned upon.  Also, many people want "discretionary" ability to utilize or tap credit for those occassional purposes.  And if that type of discretionary credit is unavailable through one CCC, it will most likely be available elsewhere.  And in that instance, it is good to level the market.

 

Finally, yes CCC's make money off of useage.  I agree.  And thus they must choose who they offer CL to and how much.  This will attract some and disuade others....the point of my post also.

 

Good points....we agree in most places.... I think we are not debating but clarifying points and maybe splitting some hairs as well Smiley Happy

Message 10 of 27
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