Synchrony account closure

[tparks5961]

I think you just made a valid point.

Banks can only leverage their money up to a certain point.

If you had 75,000.00 worth of limits you arent really using,  they could essentially pass those limits to someone else that will use them.

Let's say for example the bank had 1,000,000 of cash on hand and they were able to leverage 100% of those funds.. theyd be able to give out credit lines of 1,000,000.

Let's say that theyve given the entire amount to people that arent using it.  They cant just offer up another 1,000,000.00 to give to new people. They would have to assume their risk if 100% of the limits were used.  So In this last scenario if they gave out another 1 mil.. there exposure is more than the total cash they have on hand.

[Anonymous]

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@DenverFox wrote:

I haven't received the letters yet.. but all 4 closures reporting this morning on MyFico subscription. I just realized they actually closed 4 of my accounts. I also had a 35k Lowes account for the last 5 years lightly used and never late with a zero balance. That means they shut down 75k across the 4 cards with no explanation other than I was a higher risk. This against the fact that I am 100+ points higher in FICO than I was when I opened the accounts. This is very strange. I wonder if the company itself saw that I had 75k in open lines and perhaps they were mitigating their exposure? Perhaps they weren't making interest on any of my accounts so I wasn't a valuable customer? 

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It certainly seems to me they're going after people with large exposure. One of the shutdowns had $95K in limits. 

The problem I have with this is that they encourage this behavior. Like the My Synchrony app actually has an offers section where they show you offers for their other retail partners and their cards and they have let Credit Solutions tell customers they can have an aggregate of $100K in limits while also allowing SP CLIs every 3-4 months. Instead of closing all of these accounts they should be sending letters saying "hey, based on our evaluation of your profile, you can only have X dollars in limits so we have cut your limits to Y." Of course given the nature of Sync's business, it's possible that their contracts don't allow them to reallocate limits between accounts and they just figure it's cheaper to cut everyone off than pay for the manpower to handle the calls where people are unhappy all their cards got slashed. It's much easier to say "there's a letter coming that explains the decision and I can't tell you anything else" and on to the next call. 

It's all a business decision at the end of the day and it's not one I didn't see coming with the huge exposure many of us have and current conditions (we can't talk about the specifics because of TOS). I mean Synchrony let me get $35K in limits with $18K income and a 2010 bankruptcy which actually resulted in my Amazon Store Card being closed ($0 balance - I didn't burn GECB). It doesn't take a brain surgeon to realize that is a very high risk which is why I voluntarily reduced my own exposure for them to $16K which takes them from my highest exposure lender to third highest. It may be too late or I may skirt the AA dragon yet again but I'm prepared for either outcome. 

What sucks is that when they close them they're also making the limit the balance and effectively driving people's profiles to maxed out. That practice should be banned to be honest. 

[Guyatthebeach]

Momma Pearl,

My prayers and positive thoughts heading your way for you mom. Hope she had a speedy recovery. 

I would not worry about these Synch accounts closing. They can all replaced in time.

Guyatthebeach

[Anonymous]

I'm hoping that anyone unfortunate enough to get this type of AA isn't locked out completely. It'll be interesting to see if one can reapply and get back in on a card that was closed prior (obviously it would be a new account), and if so, how long the wait time will be...

[Anonymous]

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@Anonymous wrote:

I'm hoping that anyone unfortunate enough to get this type of AA isn't locked out completely. It'll be interesting to see if one can reapply and get back in on a card that was closed prior (obviously it would be a new account), and if so, how long the wait time will be...

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Why would you want to get another card with them if they shut you down? Especially since their shutdown will actually hurt your credit if you have any kind of balance because they'll report your balance amount as your credit limit so you'll have a maxed out card for a month. That's long enough to trip other algorithms into taking AA too, especially ones already prone to AA like Comenity. 

[Anonymous]

In my own case, I wouldn't want to lose Lowe's. I use it a lot and if this is a case of high aggregate limits, I'd be willing to pass on other Synch cards but try for that one again. 

if it's a useful card that served you well, that can be all the incentive needed to get it again. Main point of the post was whether Synch is permanently terminating relationships or if it's a heavy-handed culling of lines with no hard feelings on their end.

[Anonymous]

I mean you didn't cause them a loss and they let those who have caused them a loss get accounts again all the time. I wouldn't think there would be anything barring you from getting another account. I mean it wouldn't surprise me if you could apply the next month. 

[Anonymous]

If these shutdowns are for what Synch perceived as overexposure, I would hope so. I'm not sweating it - I only have the Lowe's card with them, with about a grand on it on 0% financing against a $12k limit. If I had several cards and had them shut down, I'd definitely forego the others to get this one back. Hoping that would be the case if someone who is shut down is thinking the same way.

[Anonymous]

It's a rather dramatic move if that's what they're doing but until letters arrive, it's all speculation. I would be shocked if they actually blacklisted people who didn't do anything wrong except have too many cards though. 

[Anonymous]

Sorry to hear @DenverFox. 
Looks like they are "over" the blue envelope phase and just closing all together. 
They actually sent me a pre-approval for their 2% card a few weeks ago....glad I didn't bite.