I read many posts here of people sharing their experience about getting a CLD from Citi, "Bank of Scamerica", AMEX, etc. The reason is simple....their net credit loss has doubled in the past 15 months alone, going from 5% to 10%. Guess what happens when 10% of credit card debt isn't paid? Your APR goes up and they tighten the credit lines to minimize their loss.
From today's citigroup investor presentation http://www.citigroup.com/citi/fin/data/p090417a.pdf via http://www.calculatedriskblog.com/2009/04/citi-net-credit-losses-rising-rapidly.html :
We have a "no whining" rule in my house 
Regardless of the reasoning for CLD, the consumer is the ultimate judge, not the lenders. BoA and others who tighten credit lines take the chance of pushing prime customers into the open arms of those institutions that did not make poor credit decisions.
BoA's bad decisions are not my problem, directly, though I may feel the indirect results. However, in the end I have the ability to move to a CU or elsewhere that is not tightening credit for those of us who are in a position to handle it.
All the charts in the world cannot force me to take responsibility for BoA making bad decisions past, and now questionable decisions present. Because they stand a real chance of pushing some very prime customers, like me, away.
Through personal and business deposits, securities and loans, I have had 7 figure amounts with BoA through the past 4 years. Much of that is now moved away because I have judged their credit to be subprime for my business.
If CITI and BoA or others have taken losses in the past 5 years, I am part of the average that has kept that percentage from being even higher....meaning the profits of my accounts has offset the losses of others. As such, these lenders will soon learn that I have the final vote for my business.
USMC has a sig line "credit is not a right, it is a business transaction." I add to that: BoA does not have a right to my money, my borrowing or my investments. While they have the right to make policy which affects all account holders adversely, I also have the right to say no, I don't accept this, I will not be an "enabler" and I will vote with my money and loans elsewhere.
BoA has no problem affecting me adversely for their overall objectives. Why then is it wrong for me to make decisions that may affect them adversely, but help achieve my overall objectives.
There is a an old saying: "Here's to you, here's to me. May we never disagree! But if we do, to hell with you, and here's to me!"
Seems befitting, no?
@Anonymous wrote:We have a "no whining" rule in my house
Regardless of the reasoning for CLD, the consumer is the ultimate judge, not the lenders. BoA and others who tighten credit lines take the chance of pushing prime customers into the open arms of those institutions that did not make poor credit decisions.
BoA's bad decisions are not my problem, directly, though I may feel the indirect results. However, in the end I have the ability to move to a CU or elsewhere that is not tightening credit for those of us who are in a position to handle it.
All the charts in the world cannot force me to take responsibility for BoA making bad decisions past, and now questionable decisions present. Because they stand a real chance of pushing some very prime customers, like me, away.
Through personal and business deposits, securities and loans, I have had 7 figure amounts with BoA through the past 4 years. Much of that is now moved away because I have judged their credit to be subprime for my business.
+1
GregB wrote:
Geez.....
Seems like an excessive reaction to the word "whining".
I thought the post was useful and had to go back to even find the word "whining". Would "complaining" have been taken any differently?
Sure, "whining" implies childlike behavior, generally for insufficient or no provocation. Complaining is something that we rational adults love to do!
And yes, it was an informative post. All the more reason to keep the tone neutral.
Hey Greg -
I was only joking about the fact that whining had become a topic. If you read the remainder of my post, it was in semi-rebuttal to yours on the "informative" side, not as a rant against your word useage.
I have posted similar info in the past, I understand the "explanation" that banks are giving. They are stating that due to "losses" in profits, they must cut back on CL's.
I explain how "losses" in CL means I must cut back on my patronage to them in lieu of those who did not suffer losses, which were no fault of mine, and utilize those institutions which have stood the test of time without requiring me to pay the price for their mistakes. And yes, this is essentially what happens, i must pay higher fees and higher apr's for the use of less credit, to which I am more capable of handling now than previously.
The net result is that the banks bad lending decisions has caused fall out. Now their new lending decisions will have additional repercussions from those who choose to "opt out" of their new policies by taking their core and best business elsewhere. Like all products or services, in a free market it is not only my right to shop the market, it is what actually keeps it healthy.
I do believe that hauling wanted to point out that some people may completely lose the true message of your post by getting caught up or offended by what may seem like a direct insult on their character....whining.
But thanks for the post and I really do have a no whining rule in my house (6 kids) 