USAA Visa lowered credit limit by over 10k with no notice

[Anonymous]

So...maybe its just me...but if I received a 12K cld I would be on the phone immediately with a manager and get the reason. For that amount of cld there has to be something to precipitate it.

Hope all works out well

Gregg

[Appleman]

Sorry to hear about the CLD from USAA. I too have some good lines from USAA and am hoping they do not CLD me...

Just looking for additional data points, have any of the following changed?

You product usage with USAA (meaning have you dropped insurance etc?)?

Has you credit usage with USAA changed dramatically?

Any change in income that has been reported?

Your scores are great...

[fredd]

Hi All,

Thanks for your posts.  I am on the phone with USAA right now.  The Rep has not been helpful at all.  She stated a letter was sent out on Nov. 19th.  The reason was that they claimed to have done a review on my accounts and the letter says that the decision was made based on "credit score" and "other factors".  What the "other factors" are she could not tell me.  She also told me I should contact the credit bureaus about my scores.  I told her that I get my scores regularly and know what they are.  She basically told me she can do nothing.

I pressed her and asked her if there is someone else on the Executive/Supervisory side that could help me.   She pushed back and then finally agreed to transfer me to someone.  I am on hold right now.

To those who asked:  Nothing has changed with my credit situation.  All scores are good and debt management is good.  In fact, I am in better shape right now than I was a few years ago during the worst part of the recession.   Even after the 2008 meltdown when everyone was seeing reductions in credit limits this card never changed.  This is very, very strange.  Still holding for someone.

I will say that I had not called USAA customer service in a long time (never needed to) and I have to say that it's clear their Customer Service has really gone downhill.

ETA:  After being on hold for almost 10 minutes, suddenly the line just disconnected.   Great. 

[happypill]

I think what has been missing in this thread is how much do you actually use those cards?  Do you regularly spend $10k, $15k or $20k per month and PIF?  If so, it would make sense for them to offer you a $30k credit limit.  If you spend a few hundred dollars a month (or even a few thousand), it is all downside risk for the lender with little to no rewards.

Every lender has different risk profiles, but they are all asking the same question, "is this account profitable enough for the amount of risk it has".  If you're charging a few hundred dollars a month to your card, pay no AF and no interest, they're probably earning a few dollars a month off your account in swipes, which is completely offset by the cost of a 10 minute phone call to their customer service (not to mention standard overhead of maintaining a website, sending out statements, etc.).  On the flip side, every lender wants to be top dog in your wallet and they know people will tend not to use a card if the limit isn't high enough.  So they want to offer a healthy limit but also limit their risk.  Is it worth it to risk $30k to generate $20 in profit for a year?

In any case, you shouldn't take it personally.  Diversify your accounts and reward those lenders that reward you (with nice limits & rewards and low fees).

[fredd]

Just called back again.  Got Rep #2 who was much nicer than the first one.  That Rep told me I am the third person today he's talked to who had this happen.  So something is definitely up.   This Rep was nicer than the first one was.  He told me he'd transfer me to a Supervisor and would stay on the line with me.  Suddenly call transfers and I get a guy in Financial Planning that has absolutely no idea who I am and cannot help me with this issue.  He's put me on hold and is trying to find someone else to help me.   I have now been transferred back to credit card rep #3 who is not a Supervisor and cannot help me either.  I am on hold again waiting for a Supervisor/Manager type. This is unreal.  I am trying hard to be nice to these people but it's clear this company has gone into the toilet with their CS.

To answer the above question:  my usage of this card varies.  Sometimes I won't use it for several months, sometimes I will use it for small/medium sized puchases, sometimes larger ones.  I try to pay it off every month, if the purchase is larger, there have been a few times where I've stretched paying the balance off over several months.

[Anonymous]

Ok....so here are my 2 cents.  30K as a credit line, as I am sure we would all agree, is a sizable, premium CL. With such a line certain expectations, varied of course by institution and algorithm, are expected. As OP has indicated....there were months that the card was not used...months where small to medium charges were applied...and months where large charges were placed and, in lieu of pif, paid over time. The inconsistencies of charge applications would have sent the algorithm wayward and, subsequent to same, produced a CLD recommendation.

My 3 cents..and although I am in the financial industry (but not a credit analyst)..I would question the necessity of such a large CL for a consumer who either fails to apply same to its expected utilization, or fails to pay off a large charges inside of the 30 day menu.

Just my feelings...I have gone through it also...and I empathize with the OP.

Gregg

[Anonymous]

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@Anonymous wrote:

Ok....so here are my 2 cents.  30K as a credit line, as I am sure we would all agree, is a sizable, premium CL. With such a line certain expectations, varied of course by institution and algorithm, are expected. As OP has indicated....there were months that the card was not used...months where small to medium charges were applied...and months where large charges were placed and, in lieu of pif, paid over time. The inconsistencies of charge applications would have sent the algorithm wayward and, subsequent to same, produced a CLD recommendation.

My 3 cents..and although I am in the financial industry (but not a credit analyst)..I would question the necessity of such a large CL for a consumer who either fails to apply same to its expected utilization, or fails to pay off a large charges inside of the 30 day menu.

Just my feelings...I have gone through it also...and I empathize with the OP.

Gregg

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A solid assessment here and I agree.

There have been an increasing number of reports of CLD and account closures across the board from all lenders when a cardholder either does not use the account for a long period of time or uses it sporadically.

I would suggest this may be an increasing trend in the financial services industry. Banks spend x amount of dollars on each account and it doesn't make financial sense to them to hold onto accounts that are not used, or to keep credit limits at a high level if they are barely utilized or used only sporadically.

Good to see you on the board again GMoney and I hope you and your family have a very nice Thanksgiving!

[Anonymous]

You as well Humu....to you and your family

All the best...always

Gregg

[Anonymous]

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@Anonymous wrote:

You as well Humu....to you and your family

All the best...always

Gregg

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[fredd]

Finally got someone on the phone with a working brain.

The explanation she gave me is this:   According to her, these accounts are being reviewed around ELIGIBILITY issues.  As you know USAA is for military people and their families. In my case, I qualify because I was once married to a service member and we had their insurance products while married and then I retained them after our divorce.  This was way back in the mid 1990s, so many years ago. 

What some folks may not realize is that years and years ago, it was also possible to open both a USAA bank account and also get a credit card with them if you were not a service member or family member of one.  You just could not get the insurance products.  So many people out there also have their banking products who were not Vets or associated with one.  That changed a few years ago, but anyone who had established USAA financial accounts prior to that change were grandfathered in.  I know this because a friend of mine is one of those people and they were grandfathered and also sent a letter that they could keep their accounts with no problem, but they would not be able to open new ones after the change took place.

So that much said, the Rep explained that the reviews they are doing are around eligibility- and people who are not the actual Veterans themselves and/or obtained accounts when they were open to anyone, are being subjected to these reductions.   So basically if you are not a Vet who opened accounts before they changed the rules a few years ago OR a divorced former spouse of someone military, they are scrutinizing you more than the actual service members and their current families are being looked at.  The Rep was very nice and explained that this had nothing to do with my credit score or other financial stuff, but the decision was made because of my status as a divorced former spouse with membership.  Nice move USAA.  I closed the account.