Shocked by USAA!!!

[recoverychick]

I never would have believed it.

Last month I received a letter that said they would be reviewing my file at the next billing cycle and that "my credit limit may be reduced, but I would still have a good card to use".  I thought it was kind of weird, but let it go.  My available FICO scores were in the mid 720's, overall utilization a little high, 41% due to an emergency, but I didn't anticipate a problem.  Had the USAA Amex 2 years.  Initially pre-approved with a 702 score for $18,000.  Never above $5,000 (currently $4,300 and had just used).  

Slashed from $18,000 to $7,100.  Never a late or missed payment.  I sent an email to ask why.  Received:

"Thank you for your e-mail regarding your credit card account. USAA Savings Bank regularly reviews credit card accounts and makes adjustments when necessary. Based on a recent review, we reduced the credit limit on your credit card account ending in ---- to $7,100.00. You'll receive a letter by mail in the next few days explaining our decision.

Your new credit limit is the maximum amount available to you at this time. After improvements have been made to the factors disclosed in your notification, we may review your credit limit for appropriate adjustments.  

Thank you,
edited
USAA"

Don't get it.  All I can think of is they want me to reduce my available credit.  Have one negative, a 30,60,90 (in succession) day late from 5 years ago on my mortgage from a missed payment recycling during a lay off.   It's still hurting a lot.  I just bought my scores.  It's only dinged me 3 points, (surprised)  but it's the principal.  You try to do the right thing and this is what you get.  I can hardly wait for this letter.

So much for consumer protection.  The banks don't care about us. had to rant.  Thanks for listening. 

[Anonymous]

Wow, I guess USAA is no better than the big banks. And I actually had considered USAA to be different, I have their Plat MC. I guess the Credit Unions are the only lenders you can rely upon.

[Anonymous]

The days of ginormous credit lines for revolving credit are over if you haven't noticed. We're in a deep recession with sky high default rates. If you're carrying a 4K+ balance on a card, then you're a prime target to get your credit line slashed since you're a risk. I think that was a prudent measure by USAA, saving themselves and you (not saying you're irresponsible). Don't take it personal. And credit unions are by no means immune from this market pressure.

[Anonymous]

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@Anonymous wrote:

I guess the Credit Unions are the only lenders you can rely upon.

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There were several reports of PenFed doing similar things before the recession was over.

[Anonymous]

Hey recoverychick!

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@recoverychick wrote:

I never would have believed it.

Last month I received a letter that said they would be reviewing my file at the next billing cycle and that "my credit limit may be reduced, but I would still have a good card to use".  I thought it was kind of weird, but let it go.  My available FICO scores were in the mid 720's, overall utilization a little high, 41% due to an emergency, but I didn't anticipate a problem.  Had the USAA Amex 2 years.  Initially pre-approved with a 702 score for $18,000.  Never above $5,000 (currently $4,300 and had just used).  

Slashed from $18,000 to $7,100.  Never a late or missed payment.  I sent an email to ask why.  Received:

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Have you recently been using your USAA Amex differently than you perhaps have in the past? Did you, for example, take a large cash advance, or make a significant purchase and started paying the minimum balance? Has something significant changed with any other USAA account that you may have? Have you looked at all three of your credit reports to discern if there have been any (surprise) changes that you weren't previously aware of?

You also noted that your overall utilization was a bit high at 41%. Do you possibly have another card that is at or close to maxed out?

[score_building]

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@Anonymous wrote:

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@Anonymous wrote:

I guess the Credit Unions are the only lenders you can rely upon.

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There were several reports of PenFed doing similar things before the recession was over.

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True but even with that IIRC it seemed to be more so targeted, for generally more easily identifiable reasons, and less wide spread than what went down with the big boys, no?

[Anonymous]

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@score_building wrote:

True but even with that IIRC it seemed to be more so targeted, for generally more easily identifiable reasons, and less wide spread than what went down with the big boys, no?

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How would you be able to tell? I assume the PenFed cc customer base is much smaller than, let's say, the Amex customer base. Getting a PenFed card, with an upfront financial check, was also more difficult than getting an Amex. Especially the first point makes comparisons very difficult.

I guess one thing CUs did not do was using these abstruse profiling models to cut people's lines (what you mentioned as targeted). Amex mastered this and hit many people who had no financial problems, just because of the neighborhood they lived in, or the now famous "suddenly shopped at Walmart".

[score_building]

Perhaps can only venture to guess based on posts and the various news outlets, AA from big banks seemed much more prevalent as it were, but I could be mistaken.

The term 'targeted' used as in 'isolated instances' not 'profiling'.

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@Anonymous wrote:

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@score_building wrote:

True but even with that IIRC it seemed to be more so targeted, for generally more easily identifiable reasons, and less wide spread than what went down with the big boys, no?

---

How would you be able to tell? I assume the PenFed cc customer base is much smaller than, let's say, the Amex customer base. Getting a PenFed card, with an upfront financial check, was also more difficult than getting an Amex. Especially the first point makes comparisons very difficult.

I guess one thing CUs did not do was using these abstruse profiling models to cut people's lines (what you mentioned as targeted). Amex mastered this and hit many people who had no financial problems, just because of the neighborhood they lived in, or the now famous "suddenly shopped at Walmart".

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[Anonymous]

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@score_building wrote:

Perhaps can only venture to guess based on posts and the various news outlets, AA from big banks seemed much more prevalent as it were, but I could be mistaken.

The term 'targeted' used as in 'isolated instances' not 'profiling'.

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Sorry for my misleading use of your "targeted" in my last post. I meant to agree to the point you made that CUs tended to target customers that had tangible problems, not just those that got flagged by broad profiling.

Regarding the "how would you be able to tell", I wanted to point out that the big cc issuers have millions of customers, and if even only a small percentage of those customers gets targeted by adverse actions, you will notice, because they are so many people. On the other hand, many CUs have only a few thousand customers, which makes it unlikely you will hear of AA occurences. Here on the board, it was definitely the banks who got their spot in the AA limelight, but how many people here do you see list CU cards, apart from the usual ones (PenFed, NFCU, Alliant).

[Anonymous]

I'd hardly compare USAA to some of the other large banks based solely on this action. They obviously think that your original CL is too risky now and they've adjusted it. This is bound to happen and should be distinguished from banks who routinely over extended CL to people who never deserved them and then said holy crap after the recession hit. I still find them to be a very responsible company.