HSBC credit line slashed for no reason!!!

[Anonymous]

America Express cut my credit line and also increased my rate by 3%!  Bank of American cuts my credit limit every time I pay it down $3,000, but at least they have not increased the interest rate.  The problem is I want to refinance my home mortgage and because the  balance is so close to the credit limit this counts against me.  I want a rate in the 4's.  I've called both, but they won't increase the credit limit.  SO when others look at my balance for those two accounts with no lates and paying more than the minimum payment it looks like I'm not responsile in paying my debts. 

Another thing is I've paid off at least 6 accounts in full, which were paid according to terms and never late AND my credit scores have decreased by at least 14 points.  I don't understand it! 

750 Lady

[Anonymous]

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@Anonymous wrote:

America Express cut my credit line and also increased my rate by 3%!  Bank of American cuts my credit limit every time I pay it down $3,000, but at least they have not increased the interest rate.  The problem is I want to refinance my home mortgage and because the  balance is so close to the credit limit this counts against me.  I want a rate in the 4's.  I've called both, but they won't increase the credit limit.  SO when others look at my balance for those two accounts with no lates and paying more than the minimum payment it looks like I'm not responsile in paying my debts. 

Another thing is I've paid off at least 6 accounts in full, which were paid according to terms and never late AND my credit scores have decreased by at least 14 points.  I don't understand it! 

750 Lady

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Seems like they are in an all around screw the consumer mode and the credit crisis as an excuse, like we are not in the same darm freakin boat as they are. CALM, CALM, I AM CALM. There it goes...

[haulingthescoreup]

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750Lady wrote:

America Express cut my credit line and also increased my rate by 3%!  Bank of American cuts my credit limit every time I pay it down $3,000, but at least they have not increased the interest rate.  The problem is I want to refinance my home mortgage and because the  balance is so close to the credit limit this counts against me.  I want a rate in the 4's.  I've called both, but they won't increase the credit limit.  SO when others look at my balance for those two accounts with no lates and paying more than the minimum payment it looks like I'm not responsile in paying my debts. 

Another thing is I've paid off at least 6 accounts in full, which were paid according to terms and never late AND my credit scores have decreased by at least 14 points.  I don't understand it! 

750 Lady

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The only way to survive these days is to have NO credit card debt.

If you have the resources to pay off your cards, do so.

What you're experiencing is called "chasing the balance." Generally, the CL will be decreased until you pay off the card, and then it will be closed. Sometimes it is left open with a $500 CL.

Almost every bank in the world has had to drastically reduce the amount of credit extended, even if it's only paper credit that is not being used. Sorry you got caught up in the whole mess.

[Anonymous]

http://money.cnn.com/2009/03/09/news/companies/banks_credit_cards/index.htm

"American Express (AXP, Fortune 500) made headlines recently after it offered to pay some of its cardholders $300 if they paid off their balances and closed their accounts by the end of April."

"And there has been speculation that Citigroup is looking to enter into a joint venture for its private label credit card division -- which serves retailers -- as a way of eventually getting out of the business altogether."

[Anonymous]

I'm wondering if I should cash in my CD's, my Roth, and money market and pay as much as I can off.  I'm not considering a home equity because I will not put my home in jeopardy; to pay down these two high balance cards?  My CDs are my emergency money!  It seems that all my efforts to increase my scores have only decreased them...

750 Lady

[haulingthescoreup]

How bad is your CC debt? And what is your total CL? (the amount of credit extended, with or without current debt)

[Anonymous]

AM CL is 25,000 balance is close from reductions (CL was 38,000) -- 13.99%

BoA CL is 25,000 balance is 24,000 from reductions (CL was 34,000)  --  10.99%

Discover CL is 13,000 balance is 6,000 (used to pay off another card with higher interest rate)--3.99%

Discover Gas Card is CL 7,200 balance is 2,900 (used to pay off another card with higher interest rate)--3.99%

Chase balance is CL is 14,000 balance is 11,000 -- 8.99%

Will be using both the Discover cards with a APR of 3.99% and will be paid off before August, to pay off the Chase card.  Then I will start working on the AM and BoA cards. 

750Lady

[haulingthescoreup]

Wow, you might want to shift into salvage mode, and figure out which cards are the most important to hang on to, including the likelihood of their forgiving you in the future.

Off the top of my head, I'd say make Discover (x2) and Chase happy, and then BofA, and then (if they're still in business) American Express.

The problem is, as you have found, that if you owe money to CCC's, you are at their mercy, and they will try to wring out every last penny from you that they can.

Only you know your full financial situation, including your retirement investments, so I can't speak to that. Without knowing your situation and disposable income, I'd say look to your CD's if you want to save a few cards, but I wouldn't touch any retirement products. I have a Roth IRA that I use as my emergency savings, but I define "emergency" as deciding which cardboard refrigerator carton I would like to live in.

[Anonymous]

Thanks...that's the order I had decided to choose as I studied my spreadsheet daily.  I hesitate to spend those funds I had squirelled away, but it looks like I've reached my emergency.  I'm not broke yet, those funds are my security blanket.  I appreciate your advice! 

750Lady

[Anonymous]

@haulingthescoreup, I was thinking the same thing but didn't want to say anything because I wasn't sure how much liquid asset 750lady has to pay them down.

@750lady, if you can afford to use a little of your emergency fund to bring this down quickly to prevent being too overextended, IMHO, do it.

Message Edited by Guardian on 03-13-2009 07:21 PM