universal default

This might be harder for CC companies to do, since the credit reports often don't accurately show credit limits. Some CC companies don't even report credit limits, to prevent others from making offers to their customers. Your other companies don't have access to your statements, only what is reported. Is there a CR field even indicating over the limit? FICO appears to use high balance if there is no credit limit given, but a current balance matching a high balance does not indicate over your credit limit.

In the end, what companies can get away with depends on what customers will put up with. If you have better offers from other banks, and one bank pulls something, they're history. Make yourself an attractive customer, and you will get the best terms.

 

Litigation over small amounts usually doesn't pay. It's necessary mainly when the repercussions go beyond the amounts involved, such as erroneous credit reporting impact on other relationships, multiplying the damage.

The problem in this case is that party A may take an action that leads party B to damage you. Even if party A fixes their error, party B doesn't reverse the damage. The solution is to always have party C in the wings, so you can dump them both. Let them consider the $100 cost of obtaining new good customers next time they implement foolish policies. Also don't run your balances so close to your limits.

Market diversification is your only reliable protection. Predatory behavior deserves lost business. If they don't want you, you don't want them. Make sure someone else does want your business.

 

Think like a buyer or purchasing agent:

Some fraction of your vendors are giving you less than the best terms, or poor service, or otherwise annoying you. Every year shop around and replace 10-20% with potentially better vendors. If they work out, good. If not, they are the ones dumped.

You steadily increase your proportion of vendors that give good terms. You have no need to take poor offers. In fact you take your best vendor's best offers. You don't have to do anything all at once. If a problem arises, you already have several vendors clammering to solve it. No one vendor has you by the balls.

It's like rebalancing your retirement portfolio.

 

I'm bothered by this concept. I have a card that has been upgraded to a Signature Visa. They have no pre-approved limit, kind of. They give you a "credit access line" which is like a credit limit. However, you can go over that limit if they approve it. You will have to pay the amount over your credit access line as well as the minimum on your credit access line the next month, but you have no over limit fee.

The idea is that if you're traveling or something, you can go over your "limit" and pay it the next month.

However, I noticed something very strange on my reports. When the card was upgraded, my credit limit was $9400. My credit limit (credit access line) is now $18,200. But my credit reports show my LIMIT as $9400. I had a balance of about $15,000 at one time, because I did a balance transfer.

So are you saying that another issuer could pull my credit report, assume that I'm in the neighborhood of $6K over my limit and jack my rates?

I would definitely file against them, and send a copy to everyone I could think of.

I can see if you're late that they can assume you have problems, but everyone knows some cards don't report limits at all or don't report them properly.

 

According to this article, universal default is a company raising rates because you're late on another card. While I don't approve of it, I can at least see a basis for it. But the credit limit idea just doesn't make sense.

 

Your card's flexible limit sounds similar to the classic Amex card. No predetermined limit, but you pay it off every month.

Any CC company is free to raise or lower your rates at any time any way. The problem would be if they advertised their rate as "fixed", or offered a "fixed on balance transfer until paid", and they renegged on this without terms in their contract or offer specifically allowing it, it would be both a breach of contract, as well as false advertising.

An actual "late" reported by another card would probably meet the conditions of their contract terms for raising rates, since the reporting company is in effect reporting an account that is "delinquent" and not meeting their own contract terms, but inferring someone else's limit, or using a different company's reporting to infer that the customer is not meeting another's contract when they are not reporting it as such would probably make a great opportunity for class action attorneys.

"Late payments" are specifically reported as such. Is "over credit limit" specifically reported, or must it be inferred from often erroneously reported credit limits and balances?

 

It must be inferred. That's the problem.

My card differs from AMEX in that the balance within the "credit access line" can be revolved. Only any portion over that limit must be paid in full. So it's sort of the best of both worlds. You can revolve the part within limit, but if you have to go over, you can, without fear of overlimit fees. You just have to pay that part. But if you're on vacation and have an emergency, for example, you can charge it until you get home to get at your other money.

 

Did you pay this CA, or did you pay an earlier OC who sent it, or sold it to this CA in error? I.e.: Who was negligent?

 

Regardless of the past effectiveness of a BBB complaint, always file one against both parties since they deserve that black eye. You still proceed with any other action you need to take, just with more visibility beyond just the people currently shirking their responsibilities.

If you paid the account, yet it was still sold as unpaid, and neither party is cooperating in resolving the matter, other consumers should know what to expect should they choose to do business with this OC. Incompetence, fraud, and violations of law should have consequences.

 

What type of account is this? CC? Utility or phone service? Are they subject to any regulatory oversight under which additional pressure can be brought?

How complete is your documentation that it was paid and closed? What were your FICO scores before and after? Other than this negative tradeline, are your scores generally high, so that any damage done is likely due entirely to this erroneous report?

Did the OC try to collect their alleged account balance from you? If so, did you dispute and did they determine no amount was due? Was your final payment made in the normal course of closing out the account, against the final statement, or was this account in collection before being paid to the OC?

Has the CA sent you a letter attempting to collect the alleged balance? In other words, is your dispute with them within 30 days of any initial collection letter received from them, or having never sent a collection letter, is your dispute in response to their credit report tradeline, which the CRA has apparently "verified"?

In other words, with your records in order, and their actions unresponsive, and with real damages likely and proveable if this continues, dot your "i"s and cross your "t"s regarding FDCPA violations in preparation for legal action.