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how to avoid CLD

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Contributor

how to avoid CLD

I'm a little nervous about a CLD on my BofA card.  (I also have a USAA card but I haven't heard of them lower credit lines...yet).

I have a CL of $22k and have approx $10k parked on it from a balance transfer at 2.99% from several years ago.  

It is/was my intention to make minimum monthly payments on that baby until the cows come home - or until I eventually glacially pay it off. It's my oldest card w my highest CL and I want to keep it that way.

 

Are my meager minimum payments (approx $125 and going down each month) enough to keep the CL slashers from BofA at bay or should I start putting little tiny charges on that card every month?  I live in AZ if that factors in at all.

 

Any strategies to avoid CLDs?

Message 1 of 11
10 REPLIES
Epic Contributor

Re: how to avoid CLD

I would not charge on the account but maybe consider paying at least 1.5 times min. if not more if that is your only debt and you can afford it.
Message 2 of 11
Established Member

Re: how to avoid CLD

i would  pay $150-200 month if you can afford it . mimimum payment=struggling= high risk= cld imo
Message 3 of 11
Established Contributor

Re: how to avoid CLD

Instead of keeping that loan in a perpetual state, you should be thinking about paying it off.  Just because it is at only '2.99%' does not mean it makes sense to pay the minimum and keep the loan forever.  Too many people do these BT for life and think they have solved the problem.  Debt is debt.  No matter if it is at 0% or 20%, it is like a three day old fish, it starts to smell.  Get rid of it.
Message 4 of 11
Contributor

Re: how to avoid CLD

I read somewhere that BOFA considers 4X minimum payment to be a sign that the borrower is not in trouble
Mar 09 Fico EQ 773 Fico TU 712 FROZEN Fako EX 699
Feb 09 Fico EQ 749 Fako TU 667 FROZEN Fako EX 676
Message 5 of 11
Senior Contributor

Re: how to avoid CLD


reots wrote:
I read somewhere that BOFA considers 4X minimum payment to be a sign that the borrower is not in trouble


i think that may sorta be based on an old rule of thumb for boa, which may or not still hold up under current market conditions. 

 

it would be nice for those paying down balances for eg. to be able to have a sense:  x times the min. is very likely to keep me out of the path of AA and so forth.  even some pif customers report AA, which can make it even more confounding to gauge how much is enough.   since there are so many factors incl payment amount being considered one would imagine that 4x's may be deemed sufficient for one customer, but not another?

DCU EQ 5.0, Citi EQ 08 Bankcard, PenFed EX NG2
EX 08: AFCU, Amex, Chase, PSECU EX 98(?)
TU 08: Barclays, Discover
Message 6 of 11
Valued Member

Re: how to avoid CLD

My girlfriend has boa 6k card and the last year and 1/2 she has not paid on several other cards and been sent to collection.  Her fico is now at about 540 and they have not cld her. 
Message 7 of 11
Frequent Contributor

Re: how to avoid CLD

I can't speak specifically about a BAC CLD, but IMO there's really no rhyme or reason to the CLD decision. It seems to be affecting the full spectrum of customers: those with high util, low util, good and bad payment history. Personally I'm not worrying so much about CLDs; just trying to do what's financially best for me: paying off those higher rate cards first, focusing on paying down balances, and letting the scores take a back seat for now to getting my financial house in order.
Message 8 of 11
Frequent Contributor

Re: how to avoid CLD


desifink wrote:
I can't speak specifically about a BAC CLD, but IMO there's really no rhyme or reason to the CLD decision. It seems to be affecting the full spectrum of customers: those with high util, low util, good and bad payment history. Personally I'm not worrying so much about CLDs; just trying to do what's financially best for me: paying off those higher rate cards first, focusing on paying down balances, and letting the scores take a back seat for now to getting my financial house in order.

 

I can tell you this, much:  I just had both of my BofA cards reduced. One was at 73% utilization (at 0%) and the other was about 40% utilization. Overall, my utilization is about 20% across the board. Most cards have a 0 balance on them.

 

I have ALWAYS paid more than the minium on all accounts, usually PIFing the smaller ones. I have run up the BofA accounts when they offer low-rate BTs, and then paid them off before the higher rate kicks in. They have a history of me with this, so they know it, and every time the promo rate expires and I pay them off, they send me another promo rate the next month.

 

When I called them, they asked me a few questions, which may lend insight to those of you who are interested:

 

1.  They asked the normal income questions first.

2.  They asked me to confirm that I have an HELOC. (I do, but it has a relatively low balance and we haven't used it in over a year, so the balance just keeps going down, not up)

3.  They asked, "are you aware that you have 8 credit cards?"  Duh. Of course I am. Actually, I have 22 cards (lol), but only 8 have balances, so my guess is that THIS is the thing that made them nervous.

 

I explained that the cards with balances have low promo rates. She "congratulated" me on: our household income; the fact that we always pay more than the minimum on every account; the fact that we are using our credit wisely. Whoop-de-do because they would not restore the limits.

 

She told me to keep bringing down the balances (duh) and call back in a couple of months. Then she said, "6-8 months." Whatever.

 

The moral is this:  I think what triggered this is 1) last month, they raised my CL; 2) the HELOC makes them nervous; 3) They are freaking out because we have 8 cards with a balance.

 

I don't know, because I did NOT increase the amount of outstanding debt, so our overall utilization is actually going down. My guess is that they recently tweaked their requirements and lowered their "freak-out" point due to their own internal problems.

 

BTW, my FICO scores have been going up for years, and I recently shot up to 736. Of course, this nonsense knocked me down to 702, but it was 736 (the highest EVER) when they CLD'd me.

Message 9 of 11
Senior Contributor

Re: how to avoid CLD

Sorry to hear it Cheech but 8 cards with balances is a lot in this credit environment. A lot.
Message 10 of 11