This practice by credit card companies just doesn't make any sense. Did anybody else go through the same crap? I have several credit cards that about a year ago had available balances of $20,000 to $10,000 each. About a year ago, I owed about 85% of available credit on them. Then, at one point my credit score dropped sharply because I had a lot of inquiries, we bought a new car, got a HELOC on our house, and my score dropped to 657 from 705. In the meantime, I was paying on these cards by Chase and Amex dilligently, never late, no derogatory info on my credit report, just a lot of balances, and a lot of inquiries. All of a sudden I started getting notices that Chase and Amex lowered my available balances to pretty much outstanding balances plus $100. So now instead of 60% credit usage which I had by then, I'm at 99.9%. Sure enough it immediatelly reflects on my credit report, and my score drops even lower. Then two months later, as I reduce my balances more, I get new notices from both of these companies saying that after "carefully reviewing my credit" they "unfortunatelly" have to lower my available credit, and I'm again at 99.9% of my available credit, even though in reality I'm at 45% of where I started just a year ago! I called both, Chase and Amex, and asked them why are they intentionally damaging my credit by decreasing my available credit and increasing my usage ratio, their response was practically the same: "because we can". And because I now have even lower score due to these manipulations by the credit card companies, I can't get any other card to transfer balances. Obviously, once I pay off these cards, I'll close them and will never go back to them again, but I don't really think they care, and it won't change their "business models", will it? Is there anything I can do to protect my scores here? Anybody had the same situation?? Thanks for hearing me out.
The CC companies do this to "protect" themselves from losses. Their reviews of your credit reports show a dramatic increase in taking out credit, and applying for more credit. To them it appears you may be running up more debt than you can handle. So, they cut their potential losses by lowering your available credit. This may not seem right, but they can do it. I am sure it is in your account terms and conditions somewhere. Your only option is to pay the balances off, and close your accounts. You also may want to talk to them again, and inform them of any positive changes in your financial picture. i.e. are you making more money than when you applied for these cards? Are you lowering debt somewhere with the HELOC? Try speaking to a supervisor or someone higher. Be ready to tell them you will go to another CC issuer.
Take a look at this article: You may want to read this article, things are in the works; http://articles.moneycentral.msn.co...eazyCreditCardTacticsUnderFire.aspx?GT1=10521
Look who you're dealing with - Citibank and Chase - the worst crooks of the credit card world. Try to pay them off as quickly as possible, and tell them to shove their cards up to where the sun don't shine.
Actually, Citi and Chase have some very good products. I've had very good service from them. Yes, they lowered limits when I was having credit problems. But as I improved my credit, they took me back way above where I was before my problems. In fact, I have a card with a large BT on it at 0.99% until it's paid off.
Citi and Chase are OK if you get the right person and your credit is clean. Many times you get a CSR who just reads off a script and will not help you. If anything bad happens to you credit-wise they are like vultures circling.
Every creditor will take adverse action when you are in trouble. I have relationships with Amex,Citi,Chase,BOA,and Discover. My home town small bank gave me a lot of lee way when I was making less money.
This is potential loss mitigation. With the current credit crisis, all banks risk and loss prevention teams are trying to find ways to avoid further losses. Reducing your available credit prevents them from losing more money should you default. Yes, it hoses your score further. Yes, if you were relying on their credit to survive a rough period, it cuts your options down further. However, in some instances, a risk department won't just decrease your CL, they will close it... and revoked by creditor is far worse than over 80% utilization. You can attempt to speak with a supervisor, (I am one at a major CC) and they will tell you that regrettably there is nothing that can be done. The business won't care if you pay it off and close it at this stage, because at least that way they'll get their money back. My advice is to not take it personally, pay it down as quickly as you can and reduce your reliance on credit as much as possible. Then decide if you want to continue to be their customer.
