USAA universal default / adverse action letter: credit limit decrease

[Anonymous]

I saw this posted on another site. The person's spouse recently received an adverse action letter from USAA for her credit card. Her credit limit was reduced from $ 5000 to $ 2300; furthermore, he said that "$ 2300 is right above her balance, too"

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November 25, 2008

Reference: Change to Your USAA Credit Card Limit

Dear xxxxx

USAA Savings Bank is committed to facilitating the financial security of all of our account holders. To ensure that the current credit limit for each account is still appropriate, we regularly review credit card accounts and make adjustments when necessary.

How this review affected you
After careful evaluation of your credit card account ending in xxxx, we're sorry to inform you that your credit limit has been reduced to $ 2300. This decision was based on your credit score, which we obtained from the consumer reporting agency listed below. Please see the enclosed page for specific reasons affecting your credit score.

While the consumer reporting agency provided us with information that influenced our decision to lower your credit limit, the agency played no part in this decision and cannot supply the specific reasons why we did so. You have a right under the Fair Credit Reporting Act to know the information contained in your credit file at the consumer reporting agency. It can be obtained by contacting the agency below:

EXPERIAN WWW.EXPERIAN.COM
701 EXPERIAN
PO BOX 2002
ALLEN, TX 75013-0036
888-397-3742

You also have a right to a free copy of your credit report from the reporting agency if you request it no later than 60 days after you receive this letter. In addition, if you find any information in the report you receive is incorrect or incomplete, you have the right to dispute the matter with the reporting agency.

Managing credit -- tips and tools
These are challenging economic times for everyone. There are many tools for managing credit, and here are a few that may help you:
# National Foundation for Credit Counseling -- nfcc.org
# Free resources available on usaa.com:
- Debt Analyzer -- Free assessment to help you learn whether you have too much debt, how to turn bad debt into good debt, how to pay off your loans faster and ways to spend wisely. (Keyword: Debt Analyzer)
- Advice Center -- Get trusted advice from USAA's licensed advisors. (Keyword: Advice Center)
- USAA Webinar: Wiping Out Debt. (Keyword: Wiping Out Debt)

We hope you understand our reasons for taking this action. We're here to help. If you have questions, please call us at 1-800-531-3305, Monday through Friday from 7 a.m. to 10 p.m. Central time.

Sincerely,
EDITED
Assistant Vice President
USAA Savings Bank

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REASONS AFFECTING YOUR CREDIT SCORE PROVIDED TO US BY THE CONSUMER REPORTING AGENCY:

DEROGATORY PUBLIC RECORD OR COLLECTION FILED, TOO MANY INQUIRIES LAST 12 MONTHS, PROPORTION OF BALANCES TO CREDIT LIMITS ON BANK/NATIONAL REVOLVING OR OTHER REVOLVING ACCOUNTS IS TOO HIGH AND LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED.

Note about your credit score: Your credit score is determined by a consumer reporting agency. USAA Savings Bank does not determine your credit score. We cannot answer questions about how your score is determined or the reasons provided by the consumer reporting agency.

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Message Edited by MojaveMoon on 12-02-2008 04:41 AM

Message Edited by llecs on 12-02-2008 01:07 PM

[kay82]

Wow that sucks...USAA must be having issues right now, makes me glad I was denied with this kind of behavior

[laz98]

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@kay82 wrote:
Wow that sucks...USAA must be having issues right now, makes me glad I was denied with this kind of behavior

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no kidding.  i was looking into them before, but now, i think i'll pass.

[guydiver]

Whoa....count me in on the pass too. This one goes on my AmEx black list of cards to Never app for.

[rubaty]

Maybe I'm crazy but I don't see anything wrong with this letter.  It clearly spells out why they are taking the stated actions which is way more responsible than the way that AMEX is treating card holders.  This person has 2 big red flags with the recent collection/public record and having high balances on their cards.

[laz98]

i don't think anyone said there was anything wrong with the letter, just that the situation sucks.

[Anonymous]

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@rubaty wrote:
Maybe I'm crazy but I don't see anything wrong with this letter. It clearly spells out why they are taking the stated actions which is way more responsible than the way that AMEX is treating card holders. This person has 2 big red flags with the recent collection/public record and having high balances on their cards.

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I see what you're saying. Speaking for myself, there were two things that surprised me.

1) In the last several years this is the first time that I can recall a report of USAA taking (this kind of) adverse action.

2) Over the last two years that I've had my USAA credit card, I've asked several times over that span of time as to whether USAA reserves the right to take any adverse action. The answer had always been the same -- The only reason for any AA on your USAA card is if you do something severely bad .. like, you start being late on your USAA card or you stop paying your USAA card.

Putting (1) & (2) together, my reason for creating this thread was to give everyone a heads up
- about the fact that USAA might now be paying much closer attention to how we're handling credit outside of USAA and
- about the kind of AA that USAA might take.

On the other hand, since this is just one data point so far, this may be an isolated situation given the multiple things going on at the same time with this person's credit.

Message Edited by MojaveMoon on 12-02-2008 09:39 PM

[manyquestions]

Crap. I'm starting to believe that they are all going to end up doing this kind of thing.  It is going to be a rough next six months if this kind of thing becomes the norm.  It seems like the kiss of death is carrying a balance of more than a couple thousand dollars.  They want you to pay off your balance so they cld you to just above your balance and chase the balance down to prod you to pay.

[rubaty]

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@manyquestions wrote:
Crap. I'm starting to believe that they are all going to end up doing this kind of thing.  It is going to be a rough next six months if this kind of thing becomes the norm.  It seems like the kiss of death is carrying a balance of more than a couple thousand dollars.  They want you to pay off your balance so they cld you to just above your balance and chase the balance down to prod you to pay.

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I have carried over $9K on both of my USAA CC for almost 4 mo and they haven't done anything to me.  I make it a goal not to have a balance on more than 5 CC at a time and never go over 50%of the CL.