HSBC credit line slashed for no reason!!!

[Anonymous]

I don't think that 20% thing is correct, I've carried a balance of nearly 2800 in the past, and in the month directly proceeding this one a balance of about 1600, they still cut me to 300. My guess is that the branded cards got the biggest cuts...

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@Anonymous wrote:

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@Anonymous wrote:
You folks are making me feel like I should think I am blessed being reduced to 1k from 2300.  I find it amazing that they have no mathematical explanation for how they come up with this.  If it is not for the fact I am trying to close a loan on a home, I could care less.  Right now I can not afford to have my debt ratio or credit screwed with.  We will all be better for this.  Just remember when the economy turns around, these same companies will be vying for our business.  Tell them we have made a decision to reduce our CC's and you were part of that group!

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Well everyone I might have found a rhyme or reason for what they are doing and how they are calculating these new credit lines. I have a friend who worked for BofA and moved to HSBC branch as a manager and we are still in touch and I see his cousin at my branch still. So I figured I hit him up and see if he knows anything internal that might help us out. He told me that most of the lower ranks don't like what is being done as they are the ones pissed off customers go and yell at but they can't do much about it since it comes from high up and they have been planning this since December of 2008 and its not something new. The effects are just now being felt because they started with certain group and working their way down the list.

He told me to check the bottom right of my letter and tell him what code is there and I wasn't sure what he meant until I noticed a small print next to the "Equal Credit Opportunity Act Notice" and it said L13_Profitability. He said ok you are in group 13 and that's why you didn't feel the hit till now, 12 other groups got slashed before you. He told me that the wording of mitigation and review and crap like that is just that, fotter for the letter. The real deal is that they want to get rid of customers that are not making them any money. There was a time when good customers were gold but now bad customers are the ones making them money by carrying a balance, having excessive usage, paying finance charges, overlimits and late fees and able to charge them higher interest, so that's the ones they want. He agrees that its an asinine position to take but that's where they are going.

First apparently they cut or closed all the dormant accounts. Then apparently they cut the small card limits, then apparently they moved to those without AF and low interest rates, and so on. With those of us that have perfect pattern, low usage and high credit and there is nothing they can use to get rid of us, they lowered the limits to 20% above your highest ever usage. So if you ever carried a high balance even for a brief period, your CL wasn't slashed as much as if you never carried a high balance at all. So hence why some go from 3k to 1k but some go from 10k to 300. In my case since my highest balance was 1977 then they gave me 2080 of my 4500 limit and so on. Although using the 20% above logic, my new limit should have been 2375 instead of 2080 but oh well.

It seems that being a responsible card user is why we are getting hit and we are being graded on the curve of how much we have spent with them. Since we PIF and don't carry balances, and don't pay finance charges, we are not profitable to them so if they reduce the limit then we will be using a higher percentage of the CL and they feel there is more chance we will default in some way or carry a balance or pay them which is absurd because I will simply stop using my card, I am not going to play their game. Anyway, wanted to share for everyone to know.

Message Edited by Guardian on 03-04-2009 11:11 AM

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[Anonymous]

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@Anonymous wrote:

So, what is your view point on my FIXED rates with AOL, Chase and RBS.....as long as  I continue to pay on time and am never late and do not charge anything additionally----can they still raise my rate.  I certainly expect them to lower the balance available but I am not intersted in spending anymore money with them ( or anyone else at this point---even with this horrific economy and unemployment rate).  Thankfully, overtime, I will pay them off--if they don't raise the rate....I am scared.  I sit in the 700's and higher and have closed a number of cards that had zero balances...any pointers would be appreciated.  Actually. Citi grossly increased my rate and I told them to put it back to our original agreement thereby canecelling the card ( just pay on it and never use it). They put it back to the original rate and then the rate was lowerer due to prime so I am better off and THEY lost a god paying customer for LIFE.  I have another tw years to pay it off and have doubled and tripled my payments.  I have good credit with AOL, RBS and Chase---HSBC sucks but I certainly will use their 0% apr at BEST BUY!

Thanks again 

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Unfortunately in the fine print of your contract with them, it states they can raise or adjust their fees anytime they wish and you have 30 days from the notification to withdraw or you have automatically accepted it. Although under normal circumstances they wouldn't and would not alienate their customers, with the credit mess right now, they will use any excuse to raise it and do what they want. Pretty much at any cost, alot of them are losing customers but banks like US Bank that treat their customers right are doing very well and so are their customers. As wrong as it may be, they are doing it and alot of people are hurting because of it. It is unfortunate but currently no one is doing anything about it, especially our government, so you need to find a way to minimize your damage and protect yourself the best you can.

[Anonymous]

Also I haven't noticed anyone on here posting with multiple HSBC accounts that were treated differently. My Ameriquest branded card was cut from 3800 to 300 (and this was after an increase from 2700 to 3800 within the last 8 months). But the two Household bank branded cards I have were left alone. One of those cards is the 2% cash back card that I use constantly for nearly all my credit card transactions (but always PIF and keep the reporting balance very very low). The other one I barely use. Those two cards have a 2100 and 2300 limit respectively.

Makes no sense...not sure if ameriquest is wholly owned by HSBC, but if not it might explain things, perhaps they are cracking down on accounts that are not quite totally within their control.

[Anonymous]

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@Anonymous wrote:

Also I haven't noticed anyone on here posting with multiple HSBC accounts that were treated differently. My Ameriquest branded card was cut from 3800 to 300 (and this was after an increase from 2700 to 3800 within the last 8 months). But the two Household bank branded cards I have were left alone. One of those cards is the 2% cash back card that I use constantly for nearly all my credit card transactions (but always PIF and keep the reporting balance very very low). The other one I barely use. Those two cards have a 2100 and 2300 limit respectively.

Makes no sense...not sure if ameriquest is wholly owned by HSBC, but if not it might explain things, perhaps they are cracking down on accounts that are not quite totally within their control.

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actually I have 4 different cards with hsbc and only one of them was cut. I have stated this before, an old Household card which I keep mostly because my wife uses it, she is the AU on it, 2k to begin with, has been 2k forever and ever and never up and never down. rate was reduced to 9.99 about 4 years ago and has been there and unchanged so far. I have a regular HSBC plat cash back card wich started at 3800 and went to 4500 almost 2 months ago now, hasn't been cut but the rate did jump from 0 to 16 instead of the 9.99 they had promised but understandable really, the DMB card was 4500 and that is the one that got cut down to 2080 and pissed me off and the HP business card backed by hsbc has been at 5k since day one and 0 interest for 6 month on each purchase and then 19 and that hasn't changed.

[Anonymous]

So, the bottom line is that I need to pay off EVERYONE IMMEDIATELY so they don't start charging me outrageous APRS?  I don't have that kind of money and most of the "fixed rate for the life of the loan cards" have never changed, even now, BUT I expect them to change and quickly.  I have had them for OVER two years with out any problems but check them daily for the NEW changes.  I am middle class, own my home outright and work very little due to the economy ( interior design) health issues and a LONG NASTY divorce where I am likely to OWE him money.  At this rate.....I am going to be on welfare.   Our own government has turned US into liars and thieves just so we can get a loaf of bread.  Yes, I didn't;t have to BUY the house and pay cash BUT it seemed more responsible than taking money out of the market that was making 14% and now I have a home equity line at 3,99%---I feel lucky BUT also am scared to death.....I am young BUT I don't see how I can afford health insurance and car insurance and the utilities.  I DO depend on my Cards to get me through the rough spots and for some personal enjoyment.  I have a small payment coming to me from a client, $2500-Do I put it in the bank or under the mattress or pay off HSBC and some other so that they can reduce my available credit and lower my FICO score too!.  I am afraid that everyone is going to start putting it under the mattress and they will just change our currency and then it will be worthless.  Bolshevik Revolution but from the MIDDLE class this time. 

Sorry, I am a little hot under the collar---my Hypertension is over the top at the moment.  

I think I want to pay off HSBC and not cancel.  Then pay off the other "little guys" and not cancel and then just double up on the FIXED rates and hope that I can get the home equity line paid off BEFORE the market turns and rates start going through the roof.  It started higher and has come down so THAT is a blessing.

I am sorry to go on and on BUT ANYTHING that someone can offer as a way out of this crisis is helpful and will NOT be discounted.  

I turn off my lights, save aluminum cans, unplug anything that is not in constant use and hunt for the best buys and pay cash---i don't buy any "luxury items" although I had a VERY nice life until three years ago---If I cannot afford to pay cash then I don't do it.  The only thing that I use my HSBC card for is gas.  I just have not had the money to pay them OFF and the outrageous attorney fees.  Fortunately I do not have children to keep me up at night worrying for THEIR future, just my own and my parents that are quite wealthy BUT have taken a HUGE hit in the market. 

I do not blame ANYONE but myself for MY situation BUT I NEVER expected for my rates to get almost to the 30% APRS when I pay on time and don't go over and pay additional money, each month.

CITIBANK is the one that started making me look at this....Raised me to 20% and I told them NO THANK YOU--So now I have until the expiration date to pay OFF the card but back to my ORiGINAL rate of 12% and NOW it is even lower than that---HA to them---They LOST a 14 year client ( before I started reading your advice) but now at least I am paying LESS to them.

UGH. Sorry BUT at this point I am scared and certainly do not want to look to my parents-----Their hard earned money has disappeared and it not fair to the other siblings for them to help me out when everyone is hurting and it may only get worse.

I have worked three jobs in the past to own my first home---There just aren;t that many available right now that will coincide with the other two that you may have to pick up---if you could be so lucky.

ON ANOTHER NOTE----you guys that are retired--Due to age, you are the one's that I really feel for in the long run.  You have been the backbone of America and NOW you are having to pick up the pieces for US.  I feel guilty.

Enough already   Thanks again for any help and I certainly appreciate the immediate responses and Simper Fi to you, Guardian ( I think I have that right.)  I appreciate that you served OUR country and sacrificed YOUR time and possibly even your life---WE owe you an infinite debt!

[Anonymous]

@edpcross, I totally understand the frustration and I can totally empathize with your situation. It's an awful situation, alot of people are hurting and it sucks as hell, but unfortunately we are on our own no matter how we try to slice this or who makes what promise to us to make our lives easier. It's not going to happen and if it does ever happen, it will be too late for most people.

Either way, without turning this into a political issue, just do the best you can to pay as much as you can, as quickly as you can and try to keep your balances low just in case. There is no guarantee on who is going to do what and when but we all need to take whatever steps we can to try and be ready to minimize the hits we take. Best of luck to you and you have my best wishes, truly.

[haulingthescoreup]

As for the high APR's, there used to be usury laws that forebade charging interest over a certain point.

South Dakota and Delaware passed state laws removing the caps, so that they could attract financial industries to their states. (Check the addresses on your CC's sometime!)

Loophole lets credit card rates rise

Nor can California ignore decisions handed down by the U.S. Supreme Court. The justices issued a doozy in 1978 when they ruled in the case of Marquette National Bank vs. First of Omaha Corp. that a bank can charge all customers, no matter where they're located, whatever rate is allowed by the bank's home state.

Shortly afterward, opportunistic lawmakers in South Dakota tossed their usury law out the window and invited Citibank to move its credit card operations -- and thousands of taxpaying workers -- to the state.

[ChesterPDexter]

I want to support the theories posted above.  I don't pay late and I don't go overlimit, but I owe a lot to many cards and unfortunately I pay a !@#$ load of interest.  The cards love me and have not cut my lines or raised my rates other than one tiny CL cut on one card and one small ratejack.  On the contrary, more of the cards have been raising my CLs regularly and even reducing my high APRs by small increments when I ask them to.  In other words, I appear to be the valued customer because I don't PIF, but I pay faithfully and regularly and bring in a lot of interest revenue.

[Anonymous]

Chester brings up an interesting point.  "I appear to be a valued customer because..I bring in a lot of interest revenue."  There is another revenue source that doesn't depend on me paying interest - that would be the transaction fees.  My limits have not been cut, but I do PIF every month (I make more than one payment and make sure my statement balance is always about 5%).  I do create revenue for the cards through transaction fees - I use them heavily.  But I do not pay interest.  What say you (y'all)?

[Anonymous]

You might be on to something. I rarely used my HSBC card, but I pretty much follow the same path you discussed regarding the use of my other cards.