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Recession impacts - Credit limits lowered and harder to get a new credit card?

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sarge12
Senior Contributor

Re: Credit limits lowered and harder to get a new credit card due to the recession.

@Anonymous  It could have run the overall utilization up if his/her credit card limits were not too high. Might have dropped scores due to aggregate utilization. Could just be that they want to look at it as well. Besides that I would not have a clue. I really do not see why a lowered credit card from Synchrony would even be questioned right now. It is pretty much common knowledge that Synchrony is doing CLD and closures big time right now. The evidence suggests that Synchrony was over extended on their credit limits in the face of this pandemic. If they get this economic engine restarted without any further outbreaks, perhaps the same will not take place with other issuers. Any further outbreaks and Katie bar the door, it will be a long hot summer. There will be major premium cards following suit.

TU fico08=812 07/16/23
EX fico08=809 07/16/23
EQ fico09=812 07/16/23
EX fico09=821 07/16/23
EQ fico bankcard08=832 07/16/23
TU Fico Bankcard 08=840 07/16/23
EQ NG1 fico=802 04/17/21
EQ Resilience index score=58 03/09/21
Unknown score from EX=784 used by Cap1 07/10/20
Message 31 of 39
Phoenixupward
Regular Contributor

Re: Credit limits lowered and harder to get a new credit card due to the recession.

👏👏👏👏👏. @GoldenloveNY   Bless you.  People don't realize that thoughts are very powerful.  Those of us who are managing during this economic/heath crisis, don't fall for the "sky is falling" rhetoric.   Two weeks ago, I told my mom I was felling guilty because economically I'm fine and some people are struggling..  My Southern bred mom told me to snap out of it and said you went through bad times and weathered the storm.  Do not carry the burdens of others, it's not for you to carry. I should be in a state of gratitude and thankfulness by sending positive energy for those to recover from this crisis.  So, I snapped out of it and realized that I'm part of the living in which I have concrete and attainable goals to strive for.  The media oftentimes does more harm than good.   Thank you for your motivational post. 

Message 32 of 39
Anonymous
Not applicable

Re: Credit limits lowered and harder to get a new credit card due to the recession.

I think it's only normal to feel sympathy and or compassion for people falling on rough times, as your Mom is correct taking care of yourself has to be first. Millions of people were out of work and stuggling before this happend and so will it be long after this crisis is over. Because it's the natural order of life.  There are simply not enough jobs for everyone on the planet, never was and never will be. Especially with the World's population growth rate, and our increasing dependance upon technology/machines. 

 

At some point there will have to be consessions made on how to manage/slow population growth. The World can only accomodate so many life forms before mass extinctions are needed to recleanse it and start over. So many people are aught up in teh global warming issue and how to prevent it, that they don't even see what's right in front of them. You can't stop nature from happening, no matter how much Money you throw at it. But they can't address the real problem and ban having children.

Message 33 of 39
Anonymous
Not applicable

Re: Credit limits lowered and harder to get a new credit card due to the recession.

I am not trying to be "the sky is falling" type, but just because states are opening, does not mean everything will go back to normal. This will not be a quick recession.  

 

If anything, this will be worse than the last recession. I work at a major bank, so let me explain. 

 

For 1, social distancing will be a requirement for most places to reopening, meaning that capacity limits will be greatly reduced by half or more. This includes employees. People that think once the economy opens back up, that they will go back to work will unfortunately have a rude awakening. Not everyone will go back. Companies will have higher per employee costs because of the need for safer infrastructure.  

 

2, places that were already in a rental housing bubble (aka prices too high) will feel the impacts of #1. Places like LA, San Fran, DC, Miami, and NY that have a large tourism and hospitality workforce will see increased homelessness and unemployment. And as a result falling housing prices because these cities are largely full of transplants from lower income cities/states (like Michigan, Illionis, Ohio). 

 

3. Banks will be way more strict this time around than in 2008 . This is because layoffs will be much more widespread than last time. It will not be in just specific industries and will be mostly due to workforce limits. Chase has already started with the 700 credit score thing. Other banks will follow. I know where I am we are not lending as much so we can preserve liquidity. High risk clients are being turned away. 

 

4. Lastly, the truely global nature of this recession will be /already being felt. Having things made in China is already proving to be a supply chain issue because of CoVid. This may end up being a positive thing where production and export speed is prefered over cost and bring more jobs to the states. We will see. 

 

Just my 2 cents based on what I am seeing. 

Message 34 of 39
sarge12
Senior Contributor

Re: Credit limits lowered and harder to get a new credit card due to the recession.


@Anonymous wrote:

I am not trying to be "the sky is falling" type, but just because states are opening, does not mean everything will go back to normal. This will not be a quick recession.  

 

If anything, this will be worse than the last recession. I work at a major bank, so let me explain. 

 

For 1, social distancing will be a requirement for most places to reopening, meaning that capacity limits will be greatly reduced by half or more. This includes employees. People that think once the economy opens back up, that they will go back to work will unfortunately have a rude awakening. Not everyone will go back. Companies will have higher per employee costs because of the need for safer infrastructure.  

 

2, places that were already in a rental housing bubble (aka prices too high) will feel the impacts of #1. Places like LA, San Fran, DC, Miami, and NY that have a large tourism and hospitality workforce will see increased homelessness and unemployment. And as a result falling housing prices because these cities are largely full of transplants from lower income cities/states (like Michigan, Illionis, Ohio). 

 

3. Banks will be way more strict this time around than in 2008 . This is because layoffs will be much more widespread than last time. It will not be in just specific industries and will be mostly due to workforce limits. Chase has already started with the 700 credit score thing. Other banks will follow. I know where I am we are not lending as much so we can preserve liquidity. High risk clients are being turned away. 

 

4. Lastly, the truely global nature of this recession will be /already being felt. Having things made in China is already proving to be a supply chain issue because of CoVid. This may end up being a positive thing where production and export speed is prefered over cost and bring more jobs to the states. We will see. 

 

Just my 2 cents based on what I am seeing. 


I am glad you are not trying to be a "the sky is falling" type. There is little doubt this pandemic will take it's toll, but recovery might be quicker than you think. This was not bad economic circumstances that created this recession, so it can be expected to not react as a normal recession would. In short, we don't have anything like this to guage how the future might be impacted. I do know this, fear of the economy collapsing is an impediment to recovery. Also, it should, and I hope does lead to more careful use of credit, and an increased desire to save for a future crisis. When the vast majority of the population can't afford even 1 missed paycheck, changes in the habits of consumers are needed. We should all concentrate on being prepared for another such crisis at all times.

TU fico08=812 07/16/23
EX fico08=809 07/16/23
EQ fico09=812 07/16/23
EX fico09=821 07/16/23
EQ fico bankcard08=832 07/16/23
TU Fico Bankcard 08=840 07/16/23
EQ NG1 fico=802 04/17/21
EQ Resilience index score=58 03/09/21
Unknown score from EX=784 used by Cap1 07/10/20
Message 35 of 39
Anonymous
Not applicable

Re: Credit limits lowered and harder to get a new credit card due to the recession.

Thank you.  I paid off my card because I keep the usage low, my scores dropped tremendously.  I am still in the 700s with one and the other is in the high 600s. I am at the point of no longer watching because you are at their mercy regardless. I did not close the card, I choose to use it for emergencies only.  I had my dollar amount increased, but I only work with 1 card.  Any suggestions? I just don't like the debt.

Thanks again.

Message 36 of 39
lowspender
Contributor

Re: Credit limits lowered and harder to get a new credit card due to the recession.


@Anonymous wrote:

Chase has already started with the 700 credit score thing. Other banks will follow. I know where I am we are not lending as much so we can preserve liquidity. High risk clients are being turned away. 


What is the 700 credit thing you're referring to.. a minimum for new apps instead of mid 6's.. a requirement for cli's, what an account holder must maintain for their account to remain open, etc..

 

 

 

 

Message 37 of 39
Anonymous
Not applicable

Re: Credit limits lowered and harder to get a new credit card due to the recession.


@lowspender wrote:

@Anonymous wrote:

Chase has already started with the 700 credit score thing. Other banks will follow. I know where I am we are not lending as much so we can preserve liquidity. High risk clients are being turned away. 


What is the 700 credit thing you're referring to.. a minimum for new apps instead of mid 6's.. a requirement for cli's, what an account holder must maintain for their account to remain open, etc..

 

 

 

 


IIRC Chase no longer entertains mortgage lending with an MMS below 700.

Message 38 of 39
lowspender
Contributor

Re: Credit limits lowered and harder to get a new credit card due to the recession.


@Anonymous wrote:

IIRC Chase no longer entertains mortgage lending with an MMS below 700.

Ah, that makes more sense. Do they make similar increases in demands from their cc apps?

Speaking of lower limits and new cards, you might have an idea about my amex/Ms. Disco question, in the cc apps section..

Message 39 of 39
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