Ok, I have two credit card accounts with Citicorp that I have had for several years. I have never made a late payment on either one. Every so often they raise the limit on the cards. On card #1 the limit was $10,200 and card #2 the limit was 15,800. I had about $1,200 available credit on card #1 and $4,000 on card #2. For the past year I have been maintaing a mortgage on a home I own in another state and paying rent in D.C. Needless to say this is expensive so I have only been making minimum payments on both cards. However, I HAVE NEVER BEEN LATE. Other than my balances being high on these two cards, my credit report is otherwise perfect. Here is the thing, I got a letter from Citicorp saying that due to "low payments", they were reevaluating my accounts. I checked today and both accounts have had the credit limits reduced to practically what I owe on them, which unfortunately, will now show me maxxed out on my credit report. What is up with this? Has anyone else had this happen?
In my experience, if credit card companies see that you are becoming a greater credit risk (making lower payments, carrying high balances,etc.), they'll revise the terms so that your interest rate is higher. Basically, they're revising the terms of the agreement to compensate themselves for taking a larger risk. Usually you can just reject the new terms of the agreement by responding in writing. Then the account is closed, but you continue at the previous interest rate. I've never heard of a company lowering your credit limit if you haven't missed any payments. If they sent you a revised cardholder agreement that lowered the credit limit, I'd say reject the new agreement. But it doesn't sound like that's the case. I foresee that they are planning to charge you over-limit fees out the wazoo in the near future. I do not know how appropriate or legal it is for them to do this. Maybe a more experienced poster will respond to your question.
A creditor can reduce the credit limit at any time, just like they can raise the credit limit at any time.
It happens all the time, whether it's raising APRs or lowering CLs! Do a search on MBNA, Chase and especially the infamous GM card (they lowered my CL for NO good reason). You'd be surprised!
And they can also cancel your accounts. GEORGE and Ron, who both used to post here regularly, had accounts closed by First USA because they had too many accounts and too much credit available. They can pretty much do any credit limit decreases, account closure or APR increases whenever they want. GEORGE had over 25 years of perfect credit, and they canceled all of his accounts, I believe.
Earlier this year, my Sony card was converted from Citi to Bank One( First USA). They also cancelled that one without any reasons. I have no bad credit and no late with them or other creditors. I lost all Sony Points that I had earned all these years. Juniper also closed my account after a year. They can close your account, increase or decrease credit limit or rate any time they want under card agreement. You accepted those terms when you apply for the card every time. Ron.
They should have let you keep the points you had earned to date and spend them. I'd do a PlanetFeedback on that one!
That's ok. I haven't earned too much points on the card any way. It is weird. Recently, I got quite a few pre-approval from Chase and I only for applied for Chase Perfect Card. It is because it has no annual fee (I don't need to use 9 times) and the rate is 12.24% var. I didn't apply on the web . I checked back with them and I found out that I have been approved for $6000. I heard that Chase is not a good bank like Bank One. I will be careful with them. By the way, it is nice to talk to uou again. Ron.
Citi did somewhat the same thing to me. I had $2k remaining on a $11k card. Never paid late, never OTL. At the time I had a Cap 1 card that was sock drawered. Problem was, an annual fee came due, I didn't know it, and it went 30+. I contacted them, they dropped the late notation and the annual fee as well. No harm, no foul. In the 2 or 3 weeks it took for Cap 1 to get the late pay off my reports, citi did an AR. They dropped my CL to my balance at the time. I didn't know. I went $3 over the limit on the card. They jacked my rates to 20%! And, they didn't want to hear any excuses. I mean, who does when they've got you by the short hairs and don't need to listen, right? Do you know how much interest you pay at 20% on a 10K bal?!!! Man, I was paying $250 min pay, and only taking $15 off the principle. Ouch. I paid them off 3 months later, and haven't used their cards since, over a year now. They are there to keep my CL to Balance ratio looking good, and that's it. Given any excuse, they'll try to stick you with that 20% any way they can. They're as bad as providian damn near. Citi can kiss my rear.
