topic Re: Amex reduced credit limits. Are we back in 2008? in Credit Cards

Amex reduced credit limits. Are we back in 2008?

Superduper2014 — Sun, 17 May 2020 04:23:07 GMT

Hello guys,

My 2 Amex credit lines were reduced significantly today.

Are you guys seeing a pattern or it may be that Amex noticed that I had just been applying to several cards and they got spooked?

I did apply for 3 cards last week and got 3 approved (citi, discover and US bank).

Any way to get these limits back to what they were by calling them or to know if they SP my credit recently to make this decision?

I had a Blue Cash with 5k that went to 1k (didn't use this card) and the Everyday card with 26k reduced to 21k and a big balance on this one.

In fact I was going to pay this Everyday card with a Bal tr from one of the new cards I was approved for.

This is in a nutshell what is happening to me.

I fear the banks are getting spooked. The Fed's chairman said recently "The scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II," Powell said in prepared remarks webcast by Washington-based think tank Peterson Institute for International Economics (PIIE).

These are the guys that are supposed to bluff us to think everything is alright. Some banks are not even offering HELOCs anymore forseeing home prices collapse. Things are not looking very good my friends. I don't want to sound alarming, but I am seeing what I saw back in 2008 and I remember well.

Thoughts are welcome about what I should do with Amex, if anything can be done at all to get back my credit lines.

Thanks

Re: Amex reduced credit limits. Are we back in 2008?

Superduper2014 — Sun, 17 May 2020 05:05:47 GMT

Interesting article. Very revealing.

https://www.bankrate.com/finance/credit-cards/issuers-lower-credit-limits-coronavirus-response/

Re: Amex reduced credit limits. Are we back in 2008?

NRB525 — Sun, 17 May 2020 05:11:28 GMT

What is the balance you owe on the ED?

Re: Amex reduced credit limits. Are we back in 2008?

Brian_Earl_Spilner — Sun, 17 May 2020 05:18:54 GMT

@NRB525 wrote:
What is the balance you owe on the ED?

I'm gonna guess about $20k or they would have lowered it more. I'm thinking that balance has been growing for an extended period of time and the new cards triggered the AA.

Re: Amex reduced credit limits. Are we back in 2008?

K-in-Boston — Sun, 17 May 2020 05:29:24 GMT

I doubt it really has anything at all to do with C19. If the card was nearly maxed out and you opened 3 new accounts all at once, that could and likely would happen in the best of times. Didn't you also apply for another Amex card very recently, too? Another thing to spook them.

Re: Amex reduced credit limits. Are we back in 2008?

Remedios — Sun, 17 May 2020 05:31:53 GMT

The balance you have on ED, was that also a BT from a different card that you're now trying to BT elsewhere?

Re: Amex reduced credit limits. Are we back in 2008?

NRB525 — Sun, 17 May 2020 12:27:44 GMT

I see there are at least two threads by the OP dealing with very closely related BT questions and AA questions.

Re: Amex reduced credit limits. Are we back in 2008?

CreditCrusader — Sun, 17 May 2020 13:29:47 GMT

@Superduper2014 wrote:
Interesting article. Very revealing.

https://www.bankrate.com/finance/credit-cards/issuers-lower-credit-limits-coronavirus-response/

But wait...I read here in FicoForums that this wasn't happening...that it was happening to just a small segment of the card-holding community.

I remember the recessions of 2000 and 2008 very clearly. In 2000, I walked into my long-time bank with pristine credit and was told that a $2,000 personal loan had to be fully secured...with cash. I asked how that was any different than using my own money and the loan officer said it wasn't, but that their terms required security during those economic times.

I've been saying it here for weeks now: This in-the-process recession is REAL...and it won't turn around in a snap, so folks should prepare for some hard credit times to follow, regardless of your file/FICO score unless you have millions in the bank and are prepared to prove it.

Edited to add: Just because YOUR lines have not yet been cut doesn't mean they won't be. CCCs don't owe anyone large lines or multiple cards...and you really have no recourse if they get ultra conservative with their lines and products during a recession. Planning for the worst means you can weather any credit storm, even during a recession.

Re: Amex reduced credit limits. Are we back in 2008?

Remedios — Sun, 17 May 2020 14:40:44 GMT

@CreditCrusader wrote:
@Superduper2014 wrote:
Interesting article. Very revealing.

https://www.bankrate.com/finance/credit-cards/issuers-lower-credit-limits-coronavirus-response/
But wait...I read here in FicoForums that this wasn't happening...that it was happening to just a small segment of the card-holding community.

I remember the recessions of 2000 and 2008 very clearly. In 2000, I walked into my long-time bank with pristine credit and was told that a $2,000 personal loan had to be fully secured...with cash. I asked how that was any different than using my own money and the loan officer said it wasn't, but that their terms required security during those economic times.

I've been saying it here for weeks now: This in-the-process recession is REAL...and it won't turn around in a snap, so folks should prepare for some hard credit times to follow, regardless of your file/FICO score unless you have millions in the bank and are prepared to prove it.

Edited to add: Just because YOUR lines have not yet been cut doesn't mean they won't be. CCCs don't owe anyone large lines or multiple cards...and you really have no recourse if they get ultra conservative with their lines and products during a recession. Planning for the worst means you can weather any credit storm, even during a recession.

Nope.

While current situation has a potential to disrupt and change lending, blaming current issues for problems that started years ago is beyond ridiculous.

People seem ready to blame COVID-19 for dinosaurs extinction.

COVID-19 only sped up the inevitable.

While this may sound harsh, I dont know any longer how/if to respond to "I only got 5 lates in the last year. Is my card closed because of COVID-19?"

OP shared their story, and that's great, but these issues were present way before the virus.

It really doesnt help anyone to be less than honest.

Re: Amex reduced credit limits. Are we back in 2008?

Revelate — Sun, 17 May 2020 15:05:39 GMT

@CreditCrusader wrote:
@Superduper2014 wrote:
Interesting article. Very revealing.

https://www.bankrate.com/finance/credit-cards/issuers-lower-credit-limits-coronavirus-response/
But wait...I read here in FicoForums that this wasn't happening...that it was happening to just a small segment of the card-holding community.

I remember the recessions of 2000 and 2008 very clearly. In 2000, I walked into my long-time bank with pristine credit and was told that a $2,000 personal loan had to be fully secured...with cash. I asked how that was any different than using my own money and the loan officer said it wasn't, but that their terms required security during those economic times.

I've been saying it here for weeks now: This in-the-process recession is REAL...and it won't turn around in a snap, so folks should prepare for some hard credit times to follow, regardless of your file/FICO score unless you have millions in the bank and are prepared to prove it.

Edited to add: Just because YOUR lines have not yet been cut doesn't mean they won't be. CCCs don't owe anyone large lines or multiple cards...and you really have no recourse if they get ultra conservative with their lines and products during a recession. Planning for the worst means you can weather any credit storm, even during a recession.

And I'll reply the same thing as I did the last time someone posted that click bait article .

myFICO members, especially in this subforum push boundaries. If it were really as widespread as suggested we would hear screaming here with the mods rushing to consolidate all the posts into a single thread for some hope of sanity. See NFCU and Duck Card and all the other rabbit holes right or wrong we've gone down on this forum.

That has not happened yet, it most certainly hadn't happened two weeks ago when bankrate posted that article.

Everyone, including banks, is holding their breath. Really we are just seeing the opening moves for example by airlines with retiring some of their fleet earlier than planned. Also a whole bunch of those unemployed may well be the underbanked too.

Don't get me wrong, arguments about statistics aside this whole C19 thing sucks blue whale... but we aren't back in the throes of the mortgage crises where people were defaulting on billions of dollars worth of mortgages.

The scale of consumer debt on credit cards is dwarfed by that problem, and credit cards have been cash cows for the lenders. If nothing else, limit chasing in the OP's case, we saw that in the sunshine and happy credit days too (2013 through 2019) and we didn't have COVID to worry about then.

When good credit / financial profiles start getting whacked for various things including non-use, that will be a change, or if we get a tidal wave of closures. This, not so much.

ETA: I probably am on some people's canary list for Amex - no real use for most of a decade and sitting with ~45K in limits with a Zync annual fee and something like $30/month averaged over that time period other than sub chasing. Not a good Amex customer TBH.

Re: Amex reduced credit limits. Are we back in 2008?

Red1Blue — Sun, 17 May 2020 14:56:03 GMT

OP, I am sorry to hear about CLD. Just be cautious in these changing times and down turn in economy.

Re: Amex reduced credit limits. Are we back in 2008?

CreditCrusader — Sun, 17 May 2020 15:54:35 GMT

@Revelate wrote:
@CreditCrusader wrote:
@Superduper2014 wrote:
Interesting article. Very revealing.

https://www.bankrate.com/finance/credit-cards/issuers-lower-credit-limits-coronavirus-response/
But wait...I read here in FicoForums that this wasn't happening...that it was happening to just a small segment of the card-holding community.

I remember the recessions of 2000 and 2008 very clearly. In 2000, I walked into my long-time bank with pristine credit and was told that a $2,000 personal loan had to be fully secured...with cash. I asked how that was any different than using my own money and the loan officer said it wasn't, but that their terms required security during those economic times.

I've been saying it here for weeks now: This in-the-process recession is REAL...and it won't turn around in a snap, so folks should prepare for some hard credit times to follow, regardless of your file/FICO score unless you have millions in the bank and are prepared to prove it.

Edited to add: Just because YOUR lines have not yet been cut doesn't mean they won't be. CCCs don't owe anyone large lines or multiple cards...and you really have no recourse if they get ultra conservative with their lines and products during a recession. Planning for the worst means you can weather any credit storm, even during a recession.
And I'll reply the same thing as I did the last time someone posted that click bait article .

myFICO members, especially in this subforum push boundaries. If it were really as widespread as suggested we would hear screaming here with the mods rushing to consolidate all the posts into a single thread for some hope of sanity. See NFCU and Duck Card and all the other rabbit holes right or wrong we've gone down on this forum.

That has not happened yet, it most certainly hadn't happened two weeks ago when bankrate posted that article.

Everyone, including banks, is holding their breath. Really we are just seeing the opening moves for example by airlines with retiring some of their fleet earlier than planned. Also a whole bunch of those unemployed may well be the underbanked too.

Don't get me wrong, arguments about statistics aside this whole C19 thing sucks blue whale... but we aren't back in the throes of the mortgage crises where people were defaulting on billions of dollars worth of mortgages.

The scale of consumer debt on credit cards is dwarfed by that problem, and credit cards have been cash cows for the lenders. If nothing else, limit chasing in the OP's case, we saw that in the sunshine and happy credit days too (2013 through 2019) and we didn't have COVID to worry about then.

When good credit / financial profiles start getting whacked for various things including non-use, that will be a change, or if we get a tidal wave of closures. This, not so much.

ETA: I probably am on some people's canary list for Amex - no real use for most of a decade and sitting with ~45K in limits with a Zync annual fee and something like $30/month averaged over that time period other than sub chasing. Not a good Amex customer TBH.

Not yet, but give it time. Landlords/mortgage holders can only wait so long for payment...and millions of lost jobs aren't coming back because many businesses are closing their doors for good, not temporarily.

Sooner or later, people who are currently kept afloat by UE and stimulus checks will have to bring current months of past due mortgage payments. Is the government going to order banks to not foreclose on those homes? Methinks that's not happening.

I get what you're saying, but I heard this sort of optimism in 2000 and 2008:

"This won't affect me! I don't hold dot com stocks (2000) or have a mortgage at WAMU (2008), so I'm good."

Except that ALL bad recessions hit EVERYONE in some fashion or another. There will be no bank bailouts this time, so AA on a wide scale is not only possible, but likely, IMO.

Re: Amex reduced credit limits. Are we back in 2008?

Anonymous — Sun, 17 May 2020 16:18:30 GMT

@Remedios wrote:
People seem ready to blame COVID-19 for dinosaurs extinction.

Oh, another one convinced by mainstream media that the dinosaurs are extinct. LOL. What do you think are in those heavily guarded big warehouses near the intersection of I85 and I26?

Re: Amex reduced credit limits. Are we back in 2008?

Remedios — Sun, 17 May 2020 16:24:39 GMT

@Anonymous wrote:
@Remedios wrote:
People seem ready to blame COVID-19 for dinosaurs extinction.

Oh, another one convinced by mainstream media that the dinosaurs are extinct. LOL. What do you think are in those heavily guarded big warehouses near the intersection of I85 and I26?

Samples of flat Earth. Everyone knows that, @Anonymous

Re: Amex reduced credit limits. Are we back in 2008?

8ways2learn — Sun, 17 May 2020 16:25:23 GMT

Nope mine just got raised from 2k to 10k

Re: Amex reduced credit limits. Are we back in 2008?

Red1Blue — Sun, 17 May 2020 16:26:29 GMT

@8ways2learn wrote:
Nope mine just got raised from 2k to 10k

Congrats with your CLI

Re: Amex reduced credit limits. Are we back in 2008?

HeavenOhio — Sun, 17 May 2020 17:54:43 GMT

There are two general reasons why AMEX decreases limits.

One is to not use a card much or at all. In those cases, calling in will likely get one's limit restored.

The other is to pay down a balance too slowly. In those cases, AMEX may restore your limit if you pay an amount they designate by a certain date.

Re: Amex reduced credit limits. Are we back in 2008?

Superduper2014 — Sun, 17 May 2020 16:57:57 GMT

@HeavenOhio

Thanks for pointing this out.

On the BC card I didn't use it. It was my first amex and used it and paid off later on completely.

I opened the ED card and used it for a small bal trans with no fee and the rest for daily purchases. My daily card for groceries, etc.

I was paying this cards minimum payments since I have zero apr until October, but had the funds to pay off completely by then. I was just trying to decide whether I was going to use my own cash or use a bal transfer from another card when this CL decrease happened.

I wonder if they actually Soft pulled my credit and saw I had applied to 3 credit cards and that played a role in their decision.

Should I just call them and ask what happened and start there or should I try to figure out if they sof pulled me (how do I do this), before I called and be prepared to answer about these cards I applied for? I applied for this cards last week, so there are NO new tradelines or credit cards in my report to spook them with real new credit lines, for all they know I could be denied for these other hard inquiries.

Also, should I offer the reinstatement for a higher large payment by a certain date or is this something they do? I am interested in continuing to use my ED card until Sept to maximize the 0 percent and also to get back my limits to keep my debt to available credit ratio as it was. This will hurt my scores.

Please advise on how to approach this so I can call (is today Sunday a good day to call Amex or credit cards in general)

Thanks a lot!

Re: Amex reduced credit limits. Are we back in 2008?

elixerin — Sun, 17 May 2020 17:17:44 GMT

@Superduper2014 wrote:
@HeavenOhio

Thanks for pointing this out.

On the BC card I didn't use it. It was my first amex and used it and paid off later on completely.
I opened the ED card and used it for a small bal trans with no fee and the rest for daily purchases. My daily card for groceries, etc.
I was paying this cards minimum payments since I have zero apr until October, but had the funds to pay off completely by then. I was just trying to decide whether I was going to use my own cash or use a bal transfer from another card when this CL decrease happened.

I wonder if they actually Soft pulled my credit and saw I had applied to 3 credit cards and that played a role in their decision.

Should I just call them and ask what happened and start there or should I try to figure out if they sof pulled me (how do I do this), before I called and be prepared to answer about these cards I applied for? I applied for this cards last week, so there are NO new tradelines or credit cards in my report to spook them with real new credit lines, for all they know I could be denied for these other hard inquiries.

Also, should I offer the reinstatement for a higher large payment by a certain date or is this something they do? I am interested in continuing to use my ED card until Sept to maximize the 0 percent and also to get back my limits to keep my debt to available credit ratio as it was. This will hurt my scores.
Please advise on how to approach this so I can call (is today Sunday a good day to call Amex or credit cards in general)

Thanks a lot!

send a significant payment, get restored, get off the radar, tread cautiously(reasonably take advantage of 0 apr)

Re: Amex reduced credit limits. Are we back in 2008?

simplynoir — Sun, 17 May 2020 17:25:59 GMT

First things first on another topic you mentioned wanting to get a new car. Unless it's a necessity I'd scrap that idea for the moment because between the BT and the continued use on the same card which is a big no-no you're pretty much flirting with other banks following suit. At this point you're just playing the BT game and it normally never ends well