topic Re: Credil Limit Reduction from a Credit Union? in Credit Cards

Credil Limit Reduction from a Credit Union?

Anonymous — Fri, 17 Apr 2009 19:21:50 GMT

I am curious to know if anyone has received a credit limit reduction from a Credit Union that is not related to a payment/credit issue?

We are seeing across the board CLD from the big banks, but from what I can see, the CU's appear to be business as usual for the most part.

Here is an article on the CLD trend:

http://www.smartmoney.com/spending/deals/Card-Issuers-will-not-Hesitate-to-Slash-Your-Credit-Line/

It is for this reason that I have the past two weeks diversified out to several CU's, as opposed to my history with BoA and Chase. I felt that if things tighten, I don't want to have all my CL eggs in the proverbial CLD basket.

I cannot find any references to CU's having any issues, though a few posts have indicated that NFCU and others have tightened lending criteria, but have not reduced lending or limits.

I'm curious if anyone here has had one?

Message Edited by txjohn on 04-17-2009 12:21 PM

Re: Credil Limit Reduction from a Credit Union?

Anonymous — Fri, 17 Apr 2009 21:39:43 GMT

Hello txjohn, I just left my cu and the lo there told me buisness is booming. People are even taking money from their regular banks and coming in buying cds, and checking in to regular cu chk acc. as opposed to reg. banks. and of course cc.

Re: Credil Limit Reduction from a Credit Union?

Anonymous — Fri, 17 Apr 2009 21:43:31 GMT

I am definitely planning to put money with those organizations that provide real value to me. Where I have been "frozen" with the banks, the CU's have welcomed me with open arms and generous CL's.

Currently I have high regard for Alliant and PenFed, and am working on NFCU. Alliant has great deposit rates, and all of those I mentioned have good to great cc/loan rates.

Re: Credil Limit Reduction from a Credit Union?

Anonymous — Fri, 17 Apr 2009 21:50:33 GMT

I'm with you I learned so much from a very friendly lo today at my cu. I guess your just not a prison # with them and at least the local cu know you by name!!

Re: Credil Limit Reduction from a Credit Union?

Anonymous — Fri, 17 Apr 2009 21:57:35 GMT

Not just local. I spoke with a LO at Alliant (Nick) who did the manual review for my Visa and Auto Loan app (online preapprovals got lost!) anyway, called back a week later and got transferred to the loan dept...got Nick. He remembered me, my name and picked up the conversation where we left off (including conversational topics that would not be part of any notes in the system) I was surprised.

Re: Credil Limit Reduction from a Credit Union?

Anonymous — Fri, 17 Apr 2009 22:03:10 GMT

Take notes folks their the real deal!!!

Re: Credil Limit Reduction from a Credit Union?

Anonymous — Fri, 17 Apr 2009 22:34:37 GMT

I haven't received any but there are reports on another forum of Penfed closing accounts due to high utilization and score drops.

Re: Credil Limit Reduction from a Credit Union?

haulingthescoreup — Sat, 18 Apr 2009 15:00:02 GMT

txjohn wrote:

I am definitely planning to put money with those organizations that provide real value to me. Where I have been "frozen" with the banks, the CU's have welcomed me with open arms and generous CL's.

Currently I have high regard for Alliant and PenFed, and am working on NFCU. Alliant has great deposit rates, and all of those I mentioned have good to great cc/loan rates.

I do worry that as CU's get flooded with folks looking for safer havens that they, too, will have to start reining in CL's.

It's like finding a great restaurant, telling all your friends, they start going too, and next thing you know, you can't get a table!

Re: Credil Limit Reduction from a Credit Union?

smallfry — Sat, 18 Apr 2009 15:19:52 GMT

@haulingthescoreup wrote:
@Anonymous wrote:
I am definitely planning to put money with those organizations that provide real value to me. Where I have been "frozen" with the banks, the CU's have welcomed me with open arms and generous CL's.

Currently I have high regard for Alliant and PenFed, and am working on NFCU. Alliant has great deposit rates, and all of those I mentioned have good to great cc/loan rates.

I do worry that as CU's get flooded with folks looking for safer havens that they, too, will have to start reining in CL's.

It's like finding a great restaurant, telling all your friends, they start going too, and next thing you know, you can't get a table!

Like the old Yogi Berra joke. Nobody goes there anymore. It's too crowded.

Re: Credil Limit Reduction from a Credit Union?

Anonymous — Sat, 18 Apr 2009 15:27:16 GMT

As long as CU's maintain credit standards, as opposed to the subprime mistakes made by the bigs, this should not be an issue. In addition, the CU's do not have the profit requirments nor overhead that public banks have. Banks are forever trying to figure out how to deliver increased value to shareholders....meaning increased stock prices and sustained dividends. This means that they have expenses and expectations that CU's will never have.

It is this constant "need" to ever improve profits and return on shareholder value that pushes banks into "creative" lending....something that delivers short term gains with long term consequences.

CU's will never replace the subprime CCC's, because if you have crap credit, no/low income and abuse credit, the CU's won't lend to you. But if you are healthy or on the rise, the CU's have the capacity to work with you in ways that many lenders cannot.

Also, this will help to correct the marketplace. If there is a big enough pull of deposits and borrowing from prime or working on becoming prime, borrowers - then banks will eventually have to compete. Kind of a supply and demand check and balance. Its not instant and takes time for the trends to have effect, but in the long run there can be no other alternative.

Eventually the pendulum will swing and if you are credit worthy, you will go where credit it available on terms that are reasonable. This will eventually begin to form a borrower segment type vacuum.

Re: Credil Limit Reduction from a Credit Union?

nathan — Sat, 18 Apr 2009 16:23:01 GMT

Credit unions take good care of its members and they will work with you when things go bad sometimes. If you do not default on them, they will hardly take any adverse action on your accounts. I love them, trust them, and will never walk away from them. They gave me a chance when no big bank would touch me, and I don't have to worry or be scared each time I use their cards. I hate big banks and it pleases me to see them go under one at a time. All my bank cc are having eternal peace in my drawer, and I could care less if the cld to 0. The bal will always be 0. Go cu, go!!!!!!! good thread, Txjohn.

Re: Credil Limit Reduction from a Credit Union?

Anonymous — Sat, 18 Apr 2009 21:20:53 GMT

I totally agree; for years I've had accounts with the major banks (BOA, Chase, Discover, Barclays), and although I have not been hit with a CLD yet, I simply do not have the confidence each time I pull out one of their cards. I feel compelled to check my accounts on-line on a daily basis to make sure that my CL's are still in-tact. Then I end-up reading these posts about the horrible things that the big baks are doing to customers, so I also moved toward credit unions as a safety net.

I started first with Alliant Credit Union (LOVE them!) and opened a DDA, Savings, OD Line of credit, Car loan AND a Platinum Rewards Visa. I've made them my MAIN bank and have moved all of my BOA accounts to them. I was hemming and hawwing for awhile about a second credit union to establish a relationship with.

I've written many threads about my research and was leaning towards Delta CU. I opened a DDA and Savings with them earlier this week, found them to be very professional and easy to deal with. However my original plan of obtaining a credit card with them got sidetracked when I spoke to a neighbor of mine. He had moved his accounts to a local Massachusetts Credit Union in the town where I live (called Jeanne D'Arc Credit Union). He was so pleased with them and opened several accounts including a Visa card.

The next day I stopped by the credit union to inquire about their products. By the time I had left I had yet another Visa card with a $10K limit, an OD line of credit, a DDA and Savings. They became my secondary relationship despite having also opened accounts with Delta. I figure I'll keep the Delta relationship is any of my other accounts go south with the credit crisis. I'd be afraid to open a credit card with them now since I already opened two new credit union credit cards. If I had less tradelines (I currently have 25 with the 2 new CU Visa cards) I might have jumped at the chance to open a CC with Delta.

Sorry for the wordy post, but thought I'd share my credit union story with the group.

Have a good weekend!

Re: Credil Limit Reduction from a Credit Union?

Anonymous — Sat, 18 Apr 2009 22:22:13 GMT

I have 8 credit unions in my credit profile. I have not had an AA by any of them.

Re: Credil Limit Reduction from a Credit Union?

Anonymous — Sun, 19 Apr 2009 11:51:43 GMT

Do you have credit card accounts with all 8 credit unions? I'm worried that if I open up a third credit union account that the other lenders might decide to CLD me or jack-up my APR.

What is your credit profile? How many active tradelines? How many new accounts?

Thanks

Message Edited by thebostonredsox on 04-19-2009 04:51 AM

Re: Credil Limit Reduction from a Credit Union?

Anonymous — Sun, 19 Apr 2009 14:03:10 GMT

The only CLD I got so far was from Eastern Financial Florida Credit Union. I opened an account a few months ago hoping to build another good relationship with a CU. Was approved for $2K line of credit. Took it all out for about a month and paid most of it off the next month. Next thing I know, the line was decreased to $800.

I don't believe it was my credit since AMEX gave me a $6K CLI so I think EFFCU just sucks.

Re: Credil Limit Reduction from a Credit Union?

Anonymous — Sun, 19 Apr 2009 15:28:09 GMT

EFFCU is in dire straits right now, bad financial shape so I'm not surprised they would have done this.

Re: Credil Limit Reduction from a Credit Union?

score_building — Mon, 20 Apr 2009 04:44:26 GMT

@Anonymous wrote:
I have 8 credit unions in my credit profile. I have not had an AA by any of them.

i'm a relatively new member at 5 out of the 8 i belong to. the ones i chose all appear to be in v. good financial shape currently.

Message Edited by score_building on 04-19-2009 09:44 PM

Re: Credil Limit Reduction from a Credit Union?

Anonymous — Sun, 19 Apr 2009 16:39:22 GMT

@jaxstraw wrote:
PenFed closing accounts now

My brother logged on and found his available balance at $0.

25k limit card with 1500 balance, never late, he has an auto loan , personal loan, checking ,savings, direct deposit, and CD with them.

He called and was told due to a periodic AR in early March they shut it down.

He has always averaged 710-720 EQ score but for Jan to early March this year an erroneous entry on all three CR dropped his score to the low 600's. He has since had them corrected and his scores are now back to 690-710 across all three. They originally approved with a 710ish EQ score.

Anyway, he called in, they told him to submit a fax to the loan committee explaining why he should have the account re-opened,and wait a week or two for a reply.

During this call he was transferred up the line and finally a Senior CSR told him they are now AR'ing and closing thousands of credit card accounts due to lower scores and/or negative entries. She said they have been fielding thousands of calls from members over the past week and are overwhelmed with members wanting an explanation.

She explained that this is not a random or one time thing, they are specifically reviewing thousands of accounts with one purpose. To see if they should AA and close them down.

I'll keep an update on his status but this is not good.

Jax

I pulled a copy of this from another thread because it was VERY relevant. Anybody else heard or have info on this news about PenFed?

Message Edited by txjohn on 04-19-2009 09:39 AM

Re: Credil Limit Reduction from a Credit Union?

Anonymous — Sun, 19 Apr 2009 16:45:22 GMT

@Anonymous wrote:
@jaxstraw wrote:
PenFed closing accounts now

My brother logged on and found his available balance at $0.

25k limit card with 1500 balance, never late, he has an auto loan , personal loan, checking ,savings, direct deposit, and CD with them.

He called and was told due to a periodic AR in early March they shut it down.

He has always averaged 710-720 EQ score but for Jan to early March this year an erroneous entry on all three CR dropped his score to the low 600's. He has since had them corrected and his scores are now back to 690-710 across all three. They originally approved with a 710ish EQ score.

Anyway, he called in, they told him to submit a fax to the loan committee explaining why he should have the account re-opened,and wait a week or two for a reply.

During this call he was transferred up the line and finally a Senior CSR told him they are now AR'ing and closing thousands of credit card accounts due to lower scores and/or negative entries. She said they have been fielding thousands of calls from members over the past week and are overwhelmed with members wanting an explanation.

She explained that this is not a random or one time thing, they are specifically reviewing thousands of accounts with one purpose. To see if they should AA and close them down.

I'll keep an update on his status but this is not good.

Jax
I pulled a copy of this from another thread because it was VERY relevant. Anybody else heard or have info on this news about PenFed?
Message Edited by txjohn on 04-19-2009 09:39 AM

YIKES! My wife and I just joined and opened Visa Travel Rewards and auto loan. Hope since we are new we were all ready considered under any new scrutiny

Re: Credil Limit Reduction from a Credit Union?

Anonymous — Sun, 19 Apr 2009 17:27:40 GMT

I'm recently new to PenFed also....around 2 weeks ago i think.

From what I am reading, it appears that everyone I can find posts about CLD/closure was due to derogatory items on CR (error or not, they had them) and their scores were below 700 at the time of AA.