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Why is Synchrony so Difficult with Credit Limits?

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Valued Contributor

Re: Why is Synchrony so Difficult with Credit Limits?


@CreditCrusader wrote:

@CreditSweeper wrote:  Sync is certainly not at the top of the list of respectable lenders



In fairness, neither are any store card providers in recent memory (not the co-branded cards, just simple store cards).

 

Think back to GE Capital and now to Comenity, Sync and Cap1. They are more or less required to market and approve credit products to folks with scores in the 600 range in order to produce profits because those stores cannot stay solvent without those 600-699 FICO folks buying with credit. Regardless of the circumstances that landed folks in the 600s, they are statistically deemed a higher credit risk to store card lenders.

 

Now, this is the bed these store card lenders have made for themselves, so let's not shed any tears for their plight in credit life. I personally think these lenders handing out large lines to prime borrowers who only marginally use them is GOOD for their business. Virtually no one with a $25,000 credit line will use anything close to that amount, but the cards are being used nonetheless and stores are benefitting from that business. Sure, those large lines represent potential losses, but how often will someone with 750-850 FICO scores roll up large balances and walk away from them?

 

Nevertheless, they givith and can taketh away at their whim. Folks who use store cards to mask their true usage are always rolling the dice, as we have seen time and again since the pandemic took hold.


This is very true.  We aren't "entitled" to high credit limits with all our lenders and they certainly have the right to give and take.  My earlier remarks in thread about leveraging "excess utilization" wasn't meant that we are entitled to that.  Still, I've complained about Synchrony's underwriting before and even though I don't have their cards, I find that sort of instability an irritant and indicative of poor business practices, especially when it apparently is happening on a large scale as recently reported.   Why approve large limits in the first place, often much more than someone will need to spend at a typical retail store, when you plan to just cut the limits later? 

 

As I've said before, there are many reasons I decided to steer away from store cards.  Not that they are bad, but they can be fickle and their usefulness depends very much on the consumer profile.  I think they are great for younger or thinner credit profiles, for people who shop heavily at certain stores and can get great value from savings, and similar situations.  If they are co-branded like an AMEX that can be used outside the store, so much the better.   But needs change over time.  If you stop shopping so much at that store, they can quickly be closed without notice, or the credit limit can be slashed.   I decided to focus on non-store cards that offer rewards and that I can use anywhere, in part because of the business model you described and the whipsaw effect it can have on my credit report.  Major bank cards are just simply more stable from my experience.  While they may still be CLD'd or closed, it's usually for-cause and is much less likely.  



Updated 07/20/2020
Total Length of Credit = 35+ years; AoOA (Currently open accounts) = 27+ years;
AAoA = 8+ years; AoYA = less than 1 year (July 2020)
Total Open Credit Lines Over $521K. Utilization Less Than 1%.
Inquiries until Nov 2020 (TU:3 -- EQ:4 -- EX:8)
New Accounts: 3/6 months; 9/12 months; 12/24 months (as of 07/20/20)
Gardening until at least 04/2021.
*Hover cursor over each card to see name & CL, or press & hold on mobile app.
Message 21 of 25
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New Contributor

Re: Why is Synchrony so Difficult with Credit Limits?

IMHO, you answered your very own question... "Synchrony is not a prestigious lender, they accept most people without a second thought."




“If you wish to get rich, save what you get. A fool can earn money; but it takes a wise man to save and dispose of it to his own advantage.” ―Brigham Young
Message 22 of 25
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Valued Member

Re: Why is Synchrony so Difficult with Credit Limits?


@simplynoir wrote:

I see it's been roughly 3-4 months since you've last been on the forums and lot has happened with Synchrony from CLDs and closures reported by various people due to the current financial environment. They're not just being difficult with you but everyone. The Synchrony you used to know in the past is gone and today they're not as generous as they once were

 

With that said I don't see why you need a higher limit on a gas card unless you're on the road all the time, similar with the Marvel card unless your restaurant and online expenses are numerous. The way I see it is Synchrony believes you can work with the limits they have provided and any more than that will sit unused. If you're attempting to use Sync to pad your utilization note that is probably not a good idea anymore with them if the credit will not be used


WOW! I must be lucky then because I got a CLI on my Amazon card last night from $2500 to $5K. I use the card every week on amazon and make huge monthly payments over the minimum monthly dues. my card is only about 18 months old. I also have the PPMC and I'm looking forward to doing a CLI but the account is only 3 months old so I will wait on that.





Starting Score: 551
Current Score: 674
Goal Score: 750


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Message 23 of 25
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Member

Re: Why is Synchrony so Difficult with Credit Limits?

They have been very liberal with me. $8500 on Amazon, $13,000 on PPMC. I have been with them for a long time, have no late payments, charge-offs or limit reductions on any cards. I try to make certain that I put a balance on all of them at least once a quarter. FICO 8 Scores are in the 780's. When I first applied my scores were probably in the 600's years ago.

Message 24 of 25
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Senior Contributor

Re: Why is Synchrony so Difficult with Credit Limits?

Yeah but those $5-8K CL's are really only pocket change, SYNCH has been targeting profiles with $25K limits or more for closure.

So most people in the lower end have gone untouched unless their profile suggests increased risk in this new climate.






Message 25 of 25
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