Wow...I just got a letter in the mail from Providian reducing my credit line by $400 to $5815.00. I just got off the phone and cxled my account. I am insulted by this treatment. Even though it is my oldest positive tradeline I still cxled them. I have been with them 4 1/2 years, never missed a payment and used the card regularly. How dare they!!! They did a soft inquiry with Experian and said this was the reason why the reduced me. Can anyone feel my pain!!!!!!!!!! I still have a mastercard with them with a $2500 limit. I might cxl that one too in a few months!!! Holla back.
JACK ME...I JACK YOU~~~REDUCE MY LIMIT...I CANCEL YOU!!! I WIN~~~YOU LOSE!!! Cancel the other one too...
Thickman66, They pulled that same BS on me back in January 2002,& I politely cancelled the account. I also have never been late on any account, they saw "fit" to lower my credit line by $200.00(which my next step was CANCELLATION & I do not miss them). So I have many credit cards & if they don't like it then "tough stuff" for them;I refuse to cancel any account because any creditor thinks I have too many. Sister Girl
Greg, They said that "At Providian, we appreciate your business and want to help you establkish and maintain a good credit history. We feel it is important to take the necessary steps to assist our customers in maintaining a positive credit history, which includes adjusting credit lines based on credit behaviour. As a result of our review of your Providian account and your overall credit usage, we will be lowering your CL on August 14, 2002. As of the date of this letter, we estimate that your CL will be lowered to $5815.00" What garbage!!! I have 10 credit cards and the only lates I have ever had were with Diners, over a year ago. The other 9 ....never late. Can anyone feel Thick's pain?????
This doesn't even make sense. Why would they lower your limit? I'm not saying that you did anything wrong only that they are acting illogically. Not that this is the first time something illogical (sp?)has happened to someone. I am sorry to hear that they did this to you after keeping the acct in good standing for so long.
The only thing I can think of is that because they are in financial trouble that they are gun-shy and reducing folks limits a lil bit to hopefully minimize potential unpaid debt. I was paying them a couple hundred a month in just interest. That sucked for me but great for them and in 55 months...never late...WOW
I think we are now seeing the downturn of extensive credit. I have a feeling a lot more of this will be occuring shortly. Due to the suffering economy, high unemployment rate in the tech and telcom sector, and the iffyness of the subprime market (not to mention the stock market) banks are going to become more restrictive in granting credit...high CLs of $10-15K and low promo rates will become a thing of the past. If your credit report shows any change (or matter how big or small) CCCs will latch on to that and increase your interest rate or decrease your CL because they are scared of the mounting # defaults that occur with a recession. It is comes down to protecting their butts. The next couple months will see many more of us posting about this same issue. Dani
Thickman, I was just curious because I paid off Providian about 3-4 months ago and tucked it away (not in sock drawer, bottom desk drawer- lol). Anyway, I had a cl of 8,265.00 and on this statement they raised my cl to 11,765.00 ~ a 3,500 increase without me doing anything. So I was trying to figure out why they are lowering CL's on alot of accounts and shot mine up?!? Not that I will use it because I have alot of prime cards, but PVN is my oldest account (since 1996) and I keep it for the ratio's and age, etc. I was hoping they would sell my account to Chase - but no such luck I guess. I think that reducing your CL by some crappy little amount is an insult ~ I don't blame you for closing it! Greg
If you close most of your credit card accounts...and then PAY IN FULL because they "JACKED" your rates and no PROMO rates are available...they would only make money on their 1-5% TRANACTION FEE and any ANNUAL FEES...nothing else...could they survive???
Well, I think the technical answer is yes they would survive, because that's the business model of the classic AMEX charge cards. I think AMEX got into credit cards as their traveller's check business fell off (where they made MASSIVE profits off the float of paid for but yet unused checks). As usual, George, you make a prescient point about the trend of the credit issuer/customer relationship. In trying to reduce risk (by lowering credit lines) and subsidize risk (by raising interest rates), credit issuers are alienating their most profitable customers. I think your overall idea is right on: credit issuers will begin to see a dent in profits directly related to changing consumer behavior motivated by credit scores and credit issuer reactions to those scores.
Actually the credit scoring and reporting farce is on a self destructive course. The long term effect being the house of cards they created with it will come tumbling down.
