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Account Closures

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Anonymous
Not applicable

Re: Account Closures


@Anonymous wrote:

Nobody ever seen ecomony crash coming until it hits them in the head. Downturn could be 5 years away, 1 year away, or just months ahead.

 

Economy is doing great for rich people, but no economy is stable when wealth disparity is shooting through the roof, even rich people knows that.


I look at something that helps. DOW transports going in the opposite direction of the market consistently, and small cap indicies as well. When they do, the market may be changing direction. Not seeing that at all. I think this is lender changes. They want to use bloated unused CC CLs for business or consumer installment loans, or they want to trim the fat from the rewards card explosion that had to end eventually.

Message 21 of 63
randomguy1
Valued Contributor

Re: Account Closures


@Gmood1 wrote:

I don't know @Anonymous. That could be the case, but I doubt it.

I know several people on the inside of the trucking industry( owner operators and brokers). Not one of them says things are great right now.
A lot of them are going under. The economy isn't as great as you've been led to believe.



Isn't the Trucking industry jobs going away at least partly due to automation rather than the economy?

Message 22 of 63
Anonymous
Not applicable

Re: Account Closures


@randomguy1 wrote:

@Gmood1 wrote:

I don't know @Anonymous. That could be the case, but I doubt it.

I know several people on the inside of the trucking industry( owner operators and brokers). Not one of them says things are great right now.
A lot of them are going under. The economy isn't as great as you've been led to believe.



Isn't the Trucking industry jobs going away at least partly due to automation rather than the economy?


We still need drivers. Job openings for those? Stuff is being shipped. People are swiping.

Message 23 of 63
Gmood1
Super Contributor

Re: Account Closures


@randomguy1 wrote:

@Gmood1 wrote:

I don't know @Anonymous. That could be the case, but I doubt it.

I know several people on the inside of the trucking industry( owner operators and brokers). Not one of them says things are great right now.
A lot of them are going under. The economy isn't as great as you've been led to believe.



Isn't the Trucking industry jobs going away at least partly due to automation rather than the economy?


Very doubtful as product is shipped normally by trucks or trains. 

I can see that happening in certain industries, but not trucking. It will be many years before trucks are automated safely.

Message 24 of 63
steelers1
Frequent Contributor

Re: Account Closures

I don't think its economy driven at all. I thinks it's more about risk mitigation . If an issue feels that for whatever reason your profile may pose a risk then they may want to verify your income.

It seems like the Amex closures and the folks that have been bitten by the RAT is their answer to some that try to take advantage of the their rewards system by manufacture spending and churning.

Some issuers are more nervous than others. Take B of A for example. If they don't like something they cut you off immediately. Utilization too high or a change in spending habits may very well get you cutoff. I can verify that from experience.

Issuers are all different. Some are steady and sensible and other act like a scared poodle.
Message 25 of 63
Anonymous
Not applicable

Re: Account Closures


@steelers1 wrote:
I don't think its economy driven at all. I thinks it's more about risk mitigation . If an issue feels that for whatever reason your profile may pose a risk then they may want to verify your income.

It seems like the Amex closures and the folks that have been bitten by the RAT is their answer to some that try to take advantage of the their rewards system by manufacture spending and churning.

Some issuers are more nervous than others. Take B of A for example. If they don't like something they cut you off immediately. Utilization too high or a change in spending habits may very well get you cutoff. I can verify that from experience.

Issuers are all different. Some are steady and sensible and other act like a scared poodle.

I agree, but why all of a sudden? It was fine to do so in 2019, but not now? Change of strategy I think. Scale back rewards cards or free up CLs for business/consumer loans expected in 2020 and beyond? That's my guess. Only a guess.

Message 26 of 63
spiritcraft1
Valued Contributor

Re: Account Closures


@SouthJamaica wrote:

@Anonymous wrote:

Today, I've seen a lot of account closures, not just with DISCOVER, but with BoA and Amex. This is one day. Probably more to come,  and with other lenders. We are such a small population, so this might involve 10s of thousands of accounts,  if not many more.

 

I'm not used to this as I've never seen it before. Before this forum, I only paid attention to my accounts. The only real AA I've ever had with any card was back in 2001 when I requested a CLD over the phone and got a bigger one than I wanted. To 0. Account closed. 

 

I've done some wacky stuff with my cards. Maxed out 2 of them and went heavy on a third at the same time in 2008 when it was looking like banks might be sliding over the hill. And did it with the credit lines I pretty much have right now. But no AA. 

 

I looked back at my statements. In February 2009, the low time for banks, I opened my Capital One card and ran up a balance to 13K by summer. Also in February 2009, I got a direct deposit of 30K into my checking account from Citi. 75% util. No AA. If there was ever a time for AA for high risk cardholders, it was back then.

 

I don't know why this is happening. The economy is excellent. The market is forward looking 6 months. It looks robust for at least the next 6 months. This economy is basically the opposite of 2009.

 

But something with lending is changing. Maybe it's not a big issue.

 

What I do know is there has been an explosion in growth of rewards cards. You used to have 1 or 2 cards. Now there are trifectas, 19 cards in a wallet, etc which is not uncommon now. Is there a bubble? All bubbles burst. Maybe there is. Lenders may be trimming their portfolios after they all scrambled to be a leader in the market.

 

I've always tried to be attractive as possible to the issuers. Not sure if it has any effect or not. I will continue to do so even if it doesn't look like it matters. I was imagining if I got such a letter that one of my accounts was closed. It's a kick in the teeth for sure. I would be offended. And it could happen to me. 

 

If I were to guess, this isn't about the economy, but this is an over saturation of the market. Catch all the fish you can, then keep the best ones. Just my opinion. 


And if I were to guess, it is once again about deregulation and bad practices in the financial sector which are catching up to the players. Moral hazard, derivatives, deregulation, securitization, collateralization, too big to fail, and the bizarre explosion of wealth being pulled from the working class to the wealthy.


In the history of man, any huge wealth gap has ended with a swing the other way.  When the greedy  get even more greedy something will happen to correct that.  across the board deregulation always ends up badly as it is put into place for the most powerful to add power and wealth at the expense of working folks.  A soft landing would be the best outcome as opposed to the other end where pitchforks, torches, tar, feathers and the guillotine come into play!  Smiley Happy


Biz |
Current F08 -
Current 2,4,5 -
Current F09 -
No PG Biz Credit in Order of Approval - Uline, Quill, Grainger, SupplyWorks, MSC, Amsterdam, Citi Tractor Supply Rev .8k, NewEgg Net 30 10k, Richelieu 2k, Wurth Supply 2k, Global Ind 2k, Sam's Club Store 11.k, Shell Fleet 19.5k, Citi Exxon 2.5k, Dell Biz Revolving $15k, B&H Photo, $5k

Message 27 of 63
EdMan63
Established Contributor

Re: Account Closures


@Anonymous wrote:

Today, I've seen a lot of account closures, not just with DISCOVER, but with BoA and Amex. This is one day. Probably more to come,  and with other lenders. We are such a small population, so this might involve 10s of thousands of accounts,  if not many more.

 

I'm not used to this as I've never seen it before. Before this forum, I only paid attention to my accounts. The only real AA I've ever had with any card was back in 2001 when I requested a CLD over the phone and got a bigger one than I wanted. To 0. Account closed. 

 

I've done some wacky stuff with my cards. Maxed out 2 of them and went heavy on a third at the same time in 2008 when it was looking like banks might be sliding over the hill. And did it with the credit lines I pretty much have right now. But no AA. 

 

I looked back at my statements. In February 2009, the low time for banks, I opened my Capital One card and ran up a balance to 13K by summer. Also in February 2009, I got a direct deposit of 30K into my checking account from Citi. 75% util. No AA. If there was ever a time for AA for high risk cardholders, it was back then.

 

I don't know why this is happening. The economy is excellent. The market is forward looking 6 months. It looks robust for at least the next 6 months. This economy is basically the opposite of 2009.

 

But something with lending is changing. Maybe it's not a big issue.

 

What I do know is there has been an explosion in growth of rewards cards. You used to have 1 or 2 cards. Now there are trifectas, 19 cards in a wallet, etc which is not uncommon now. Is there a bubble? All bubbles burst. Maybe there is. Lenders may be trimming their portfolios after they all scrambled to be a leader in the market.

 

I've always tried to be attractive as possible to the issuers. Not sure if it has any effect or not. I will continue to do so even if it doesn't look like it matters. I was imagining if I got such a letter that one of my accounts was closed. It's a kick in the teeth for sure. I would be offended. And it could happen to me. 

 

If I were to guess, this isn't about the economy, but this is an over saturation of the market. Catch all the fish you can, then keep the best ones. Just my opinion. 


You must have read my mind. I almost posted the same type of thought in the Disco thread. I do think the market has grown to the point where banks are forced to be more subjective. They are paying out a lot of reward money and they are becoming more picky and risk averse. 


Message 28 of 63
simplynoir
Community Leader
Mega Contributor

Re: Account Closures


@Anonymous wrote:

I agree, but why all of a sudden? It was fine to do so in 2019, but not now? Change of strategy I think. Scale back rewards cards or free up CLs for business/consumer loans expected in 2020 and beyond? That's my guess. Only a guess.


If there's something that has been repeated here is that this forum is not representative of the public in general. We are a very niche group in the credit community so of course more stringent action would take place with credit profiles like ours. The normal person isn't going to carry a lot of cards some that don't even see any use because why deal with that headache. Maybe if they're playing the BT game but other than that it's normal to see someone using their CSR or AMEX Platinum for everything even if we would scoff and ridicule someone here for doing that

 

Another thing is some of the closures reported have had good reasons for doing so once the details are shared. And along that note there are some who just say "omg they closed my accounts and I don't know why!!!" without sharing the whole story. To that point we are depending on datapoints that not everyone is going to give and inflate the situation. What I mean by that is a negative response garners way more attention than something that is SOP for everyone else. One closure must suddenly mean there will a hundred more coming because of this one person or collection of people saying so. Imagine someone making a post saying "hey my accounts are still open why is that?" That would be asinine honestly

Message 29 of 63
steelers1
Frequent Contributor

Re: Account Closures

Between credit card fraud and reward gamers I'm sure that their the margins keep shrinking.

I think their algorithms are becoming more focused. Hence the Amex RAT closure storm of 2019.
Message 30 of 63
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