@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
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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.
Nope mine just got raised from 2k to 10k
