02-23-2009 08:10 PM
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?
02-23-2009 11:27 PM
02-24-2009 12:49 AM
02-24-2009 02:07 AM
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?
02-24-2009 07:22 AM
02-24-2009 01:01 PM
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.