Affected by credit card changes?

I have had several companies with which I have credit suddenly lower my credit limit. This despite the fact that I have never had so much as a single late payment. My concern is that this lowered limit makes it look like I am suddenly using a greater percentage of my available credit; even though, I have not added a dollar to the actual balance. That will have an adverse effect on my credit score. I really tired of “playing by the rules” only to have the rules changed without cause.

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Yeah- we got a notice from a bank that we have dealt with for years. We’ve never been late with this bank- in fact, we paid more than the minimum 90% of the time. Bottom line, banks don’t care anymore about “good” customers. They’re going to look out for themselves and it’s going to hurt the little people like us who work our a***s off trying to manage our finances and our credit ratings. This is not their fault- it’s the fault of government trying to control things they have no business controlling.We were promised a certain rate for the life of the balance, but of course, there is always the loop hole that the banks have that we don’t have and that is changing the minimum payment rate. Now we don’t know what we’re going to do, because we have a sizeable balance on this card.

I cannot even begin to fathom the far reaching consequences of this for common, low income, hard working Americans. Things are already tight because of the economy- this is going to magnify the problem many times over. In 2-3 years, I could really see the recession doubling because the government has meddled in things it should have left alone.

Can’t blame this one on Bush. Thanks Obama! This is change we can believe in!

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I don’t have a balance. It feels good.

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Don’t blame the Obama adminstration, people. I completely believe in capitalism but once a business turns into a monster, it believes that it can do no wrong. This is all a result of the actions of the credit industry. They were the ones who made credit easy extending it to people who had no business getting more credit. Even responsible people who could afford it during the old economy are in trouble.

The execs looked at the short-term profitablility. Just look at how management bonuese are given. To profitibility over the last year. Nothing long-term was examined.

If a person is already overextended, burdening him with higher minimum payments and higher rates is only going to push him toward defaulting, not paying off sooner.

Quit looking at actuarial tables and use some common sense. This is a new era of business.

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These credit card companies can be tough to deal with. Fortunately, I am debt free and I have over $4,000 coming my way from my tax refund. That will help me to weather this financial storm and stay debt free from the credit card company tricks.

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All of a sudden we have credit cards cutting our credit limits by thousands of dollars, falling below the current balance, causing over limit fees and penalties, increased interest rates, and new monthly payments that are way beyond our budget. After all these years of paying on time, playing by the rules, I feel they are pushing us into bankruptcy…and if they keep pushing, I will gladly go there.

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Pushed me to bankruptcy also, I did a chapter 7, was able to keep my home and my cars but now the CC companies get NOTHING! Way to go Chase!!

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Yes, Citibank raised my interest rate and then raised my credit limit???? WTF? I did call and get them to lower the rate by 1.5% at least but I am paying it off and then never using the darn thing again.

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Same here as with many others. Never a late or short-payment. Regular pay raises. No demonstrated inability to pay And yet interest rates go up and credit limits come down. The banks say they’re making the changes because consumers credit-to-limit ratio is going up and credit scores are going down. But they are the ones making this happen!

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Credit card company’s are eventually going to push many cardholders into
bankrutcy or they will pay off there balance and close the account, an with a lot of people going in that direction what will become of the great bank giants then?

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These banks have proven themselves to be evil to the bone. I appluade the President for making these changes. The banks have had free reign to trample consummers and they have to be stopped!

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Amen Suga.

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As a small business owner I rely on credit to help with expenses while wating payment from clients. My credit score was near 800 and never late on payments. Just after I sent a 6k payment to my Bank of America visa they thanked me with a reduction in my credit limit. Reduced from 30k to 20k. Increased my interest rate from 9.9 to 24.9%. Again I have had this card for 15 years and never late, the banks see an opprotunity to pummel us with these moves and before we can get it resolved they make millions of $$ on the increases. Only after I filed a complaint with the dept of the treasury did I get it resolved. But it took two months. Do the math. If a bank has done this to you then the treasury dept will get on their butts.
I don’t like Geitner either but the politicians are closley linked to him and will hear about it. The banks are very scared and trying to milk us any way they can to get some extra cash. Write a letter and you will get a call. It worked for me.

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I think what some of you are missing is that the Prez/Congress aren’t correcting the problem. Yes, CC companies are in business to make money, nothing else. However, they’re enacting the credit limit reductions, interest rate increases, etc. because they have a limited amount of time to conduct business as usual, courtesy of the new financial regulations. You might have the “which came first, the chicken or the egg?” paradox reversed in this scenario.

And Mr Hughes – thanks for the advice. Your words provided the epiphany I needed right now. Crap: I just remembered that I had to put myself through college and needed to find some way to pay for it. This cash-only gospel is great if you don’t live in reality. American business and business abroad is entrenched and reliant on the ability to finance. Is a person evil because he wants to finance a $1000 television as opposed to paying in cash? What if he/she pays off the balance timely and responsibly?

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MrHughes….I understand what you are saying, and I understand that there are people out there that may use credit in the manner you described. But for many of us, that isn’t the case. Many of us are hard working Americans that are conservative about what we spend, sometimes the best place to spend at the given time is on credit. I monitor my accounts and credit weekly. I worry about my situation. I don’t feel I abused my credit. I feel like I was in a bad place at a bad time, then all of a sudden the economy went south which made things worse. But for someone who has paid on time 99% of the time (the other 1% was because it slipped my mind, not because I didn’t have the means to pay) and paid more than the minimum payment 99% of the time, I am getting slapped in the face with the changes of higher rates and credit limit cuts, which is killing my available credit percentage, which is killing my credit report, which is not showing the kind of customer I really am. And the funny thing is I haven’t charged anything to a credit card in a long time. I agree with all the other people….how is the credit company helping me by making it so much harder for me to pay them by the changes they are making? I am not the type to run out on anything, so I will take care of my debts. But I do remember things, and I will remember how I was treated during these times by these companies, and when they want my business again one day, I will be glad to tell them that isn’t going to happen.

But my original point is everyone’s situation is different. No one should be on here judging people because they have credit card debt. Yes many people abuse it and should have never had it to begin with. But there are others who needed it for emergency situations and haven’t recovered yet, or even responsible people that had it very well under control until this economy took a bad turn and the credit card companies started making all this disturbing changes, maybe someone lost their job or something else and maybe they didn’t have a choice but to use credit for the time being,

If you have been a situation in which you have never owed anything to a credit company, then good for you. You can and should be proud of that. But you don’t have to come on a site like this and start bashing others who haven’t been as fortunate for whatever reason.

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Suga – accept my heartfelt congratulations. However, if you fail to distinguish between responsible and irresponsible lending/borrowing and also fail to understand the significance of structured/leveraged finance on this planet, then you are far removed from reality. Not trying to strawman, but I get the feeling your general attitude toward borrowing/lending is that of disdain.

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I have an American Express card, and a Bank of America VISA card. American Express contacted me and said they are lowering my credit limit. I always paid the card bill in full whenever I used it. So I could see no reason for them changing my status. They cut the limit in half. When I called American Express for an explanation, the fellow said that they reviewed my credit situation, and determined that I was a “risk” at the higher level. Strange… nothing in my situation changed. Same income, same address, same card usage pattern… and never even came anywhere close to charging to the limit.

Bank of America sent me a letter saying that they were increasing my VISA card interest rate by 4% higher. I had a zero balance on the card, and had never, ever been late… and always paid my bill on time – usually in full, or maybe I would pay the balance in full within 60-days of a charge. I called them, and told them that I did not want the increased interest rate. I told the woman that I was a good customer, and that there was no justification for the increase. She said that the increase had nothing to do with me; she said it was because of other customers who default on their balance. I asked why I was being penalized if I didn’t deserve it. She said that everybody was being penalized. I asked her what my alternatives were if I didn’t want the higher interest rate. She said that my only option was to cancel the card. So I cancelled the card. Their loss. Not mine.

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If the Federal Reserve had not been artificially lowering interest rates and printing vast quanities of money, most people would never had access to all the ridiculous amounts of consumer credit they had. Not only would this NOT have been a problem, it would have been a far better thing for our country and the world. Instead of the malinvestment by companies based on false prosperity of credit, there would have been appropriate investment in sustainable goods and services.

The Federal Reserve is the most destructive and criminal organization in our nation today (just ahead of the federal government). It must be audited (HR 1207) and then must be abolished. They are at the heart of every financial disaster that has befallen this country since their creation in 1913. Please go to http://www.mises.org and get yourself a proper education on economics, the Federal Reserve, and why this country and most importantly the financial security of all of us is being destroyed by the presence of this organization in our economy.

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@MrHughes – Thing is I never wanted a reduction in amount owed, just keep my old terms and payment. I was willing to pay them off. Even went so far as to close some accounts to keep from adding to my balances and that added to the “negative” on my credit report causing issues. I had no physical cards on me in the last year and made no charges, but that still did not stop them from raising rates and minimums and lowering limits, thus making my credit even worse. Some times I was told it was because I was not using the accounts that “triggered” the changes.. huh?? I was damned if I did and damned if I didn’t. Lesson learned for sure. BTW, while the feds were lowering the interest rates for banks, banks were not raising the interest paid on savings or lowering rates on credit cards.

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I have multiple credit cards and no balances. I don’t care what the interest rates are and only take passing notice of the credit limits. I use a few of the cards and always pay them off in full. My credit card issuers haven’t changed my account terms except to offer me low balance transfer rates (to try to get me to carry a balance; not gonna work, guys).

It seems to me that some of you need to learn to live within your means. And that’s not condescension — that’s empathy. I used to carry about $12k in credit card debt but buckled down and got it all paid off. Never again!!

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Yes, I’ve never been late on a payment and have very good credit except my debt to income ratio is to high. As a result Bank of America slashed my credit cards credit limits. Chase hasn’t cut my limits but they’ve raised my rate on my credit card to 20% starting this month – that is highway robbery so I’m rushing to pay it off but it will take a couple months, meanwhile I’m stuck since I can’t transfer it to my other credit cards.

The frustrating part of all this is that I cut my unsecured debt in half from 70K to 30K, my Debt to Income used to be much higher yet it wasn’t a problem back then and my interest rates were much lower.

Also frustrating is that Bank of America bought out MBNA and Chase bought Providian so now it seems like its basically just Bank of America, Chase, Citibank and to a lesser extent Capital One and Discover issuing credit cards. That’s part of the problem.

None of my banks or credit unions want to give me a personal loan to pay off the Chase card.

So my job hasn’t changed, my income hasn’t changed and my home is still my home that I own. What’s changed? The banks made bad lending decisions and now they are taking advantage of us!

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Chase’s actions are a result of two things. The first was the bailout.
Basically, Chase does not need its credit card division. It all the stimulus funds it needs, and knows it can get more. Its decision to raise minimum repayment rates of 1.2 million cardholders is just pure greed. Chase gets a better cash flow, and does not really care if it loses cardholders along the way. It is a short term play. What Chase is missing, is that there wont be more bailouts, and the million cardholders it dumps will remember down the road. And the million is really four or five million friends and families, and the future revenue lost will include not only from credit cards,but loans mortgages and other investment interest as well. Chase is putting alot of people in hardship situations, especially in this economy. People will remember, and it will have an effect on Chase’s bottom line. By the way, their are currently 12 lawsuits against Chase. Just google Chase raises minimum payments…..

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It’s interesting that so many folks take issue with my earlier statements. I was very clear in my original post. I’m not perfect; I’m far from it. But, what I find troubling is the sense of entitlement some of y’all display. If you can only afford to make minimum payments on your credit cards, then you have abused credit (outside of some dramatic life event). If you are mailing off several thousand dollars in a given month to get your balances manageable, then you are abusing credit. If you have to cut up or hide cards from yourself and not use them for months on end you likely have issues with credit and living beyond your means. Those things are not the fault of the credit card companies. And, while I appreciate that there are lots of hard working people out there that does not make one immune from paying the piper. Also, it’s a lot harder to file bankruptcy now-a-days based on laws passed within the last five years. It’s not like Monopoly where you just turn some cards over for a few turns around the board. So, I wouldn’t think of that as a get out of jail free card.

Also, you are not entitiled to less than 5% on a credit card. It amazes me that people get upset when the credit card company raises rates, so they can make money because they don’t want to give you 0-2.9% interest forever. Again, they are not in it for the goodness of their hearts. Are Kroger and Publix selling groceries because it gives them a fuzzy feeling helping people? Does Philip-Morris sell cigarettes to spread joy to the world one puff at a time? These corporations are not your friends!! They see all of us as financial transactions; we are nothing more than a chance to make profits and avoid losses. The problem is that most of us are willing to hand them our money for little to no effort for stuff we don’t really need or want. That’s not on them. That’s on us; personal responsability!!

I’m not sure I believe some of y’all when you say you have perfect credit scores and have never missed payments. I have a card that with BOA where I earn airline miles. Notoriously, those are bad deals. The card leverages the “benefits” it gives you with a less than ideal interest rate. Moreover, airline cards are a bad deal because according to Consumer Reports 75% of airline miles earned through credit card offers are never redeemed. But, that’s another subject for a another time. My rate on this card is 13.24%. I think it was aproximately 16.9% in the recent past. My credit line is in excess of 20K. Why isn’t BOA touching my limits or raising my interest rates? I refuse to believe they just forgot about me…

Above all, the credit card companies and banks are not pushing people to bankruptcy. It’s the “I’ve gotta have it” comsumerism consumption syndrome we’ve embraced as Americans in the form of piles of clothing, Xmas toys, and hot new gadgets. It’s the expensive meals out instead of eating at home and watching a pot. It’s driving late model cars because the dealer is willing to give 0% interest rather than keeping older reliable car that you already have with no payments and lower insurance premiums. It’s refusing to clip coupons and economize. It’s buying more house that one can afford. Are any of these things really the banks fault? The banks didn’t make us buy any of these items. Mr loan officer didn’t call us up and say “Could you please take these tickets and hotel for weekend to NYC, Minolo Blanics, 30K wedding, or seats behind the glass at the Thrashers”. They might have given us enough rope to hang ourselves, but the damage was done by us.

I feel empathy for a lot of y’all too. This isn’t about making me feel better or anyone else feel badly. But, I think we all could do a lot of work around the emotions we have around spending money and why some of us make the choices we do. I’m just saying that it’s not healthy and there’s another way.

@Seminole
You shouldn’t be paying for college with credit cards. That’s what student loans, work study, fellowships, part time jobs, stipends, etc are for. However, education is one of the few things I would say someone should use credit to purchase as it increases earning power. Also, I don’t think that people taking advantage of financing offers for 0% at Best Buy, etc are evil. But, why would these companies offer 0% in the first place? There are three reasons… First, people spend more when they use credit. It’s been proven that people spend somewhere between 10-15% more than when they have to count the cash out themselves versus swiping a card. That’s a win for the store. Second, having an account guarantees that you will come back into that store versus shopping with competitors which equals more transactions where they charge the regular interest rate which equals profits. Third, the vast majority of people do not pay their balances on time, so they never actually benefit from the 0% offer that they signed up for in the first place. That’s how a company like JC Penny’s makes more on financing than merchandise.

Lastly, plenty of successful businesses are run without accumulating debt. Walgreens, Microsoft, Harley Davidson, and Cisco Microsystems are all examples. I’d encourage you to read the Millionaire Next Door or the Millionaire Mind. You be surprised by what/where the wealthy drive, eat, wear, and live. They didn’t earn their money signing up for credit cards so they could get a Braves beach towel, sunhat, $75 gift card to Longhorn, frequent flier miles, reward points or Discover cash back offers.

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Fine. I carry a balance. What of it? I paid all my minimums plus some on time. Paid off a loan over a year early.

So what did “I” do to deserve this?

I didn’t vote for ego boy and his admin who believe we are in this ish “together.” I didn’t buy a home I knew was a scam. I didn’t use the credit increases.

My credit report as green as a xmas tree. Does it matter? Nope.

We are under attack and no one can step up and help us but only blame us? Give me a break.

Bush didn’t sign the damn bill, ego boy did! Feb. is a long way away and we are going to be screwed even worse!

If you shut down a card you trash your rating but the banks can do it by lowering your limit?

Nothing makes sense.

Oh and if you aren’t aware they are now looking at what stores you shop at and where you buy. So now you are going to take a hit for being a wise shopper?

I don’t ever want to own a house. Are you kidding me with the tax rate in my area? I don’t ever want a new car. Are you kidding me with 17″ tires and a engine I can’t work on myself?

So I’ll try but in the end push me to far and guess what … I just don’t give a damn anymore. Why line your pockets while you put me down to $100 a month to live on? I was doing my part and you attacked. Well guess what…I have weapons to. Survival is an instinct no one should ever mess with.

The gov’t needs to get out of bed with the banks and do something to stop all this madness. If ego boy cared he would speak up on this — instead listen to the crickets everyone.

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To Mr. Hughes – if we could all live in your world life would be so wonderful, but we don’t. The point of this post is not to lecture us for getting in this mess. The point is that credit card companies that we have been dealing faithfully with for many years are now drastically changing the rules just ahead of the credit card reformation Obama is putting into place.

For me – I have four Chase cards. Three have lifetime low interest rates of between 3.99 and 4.99%, the other one has a variable rate currently at 9.24%. I received four notices from Chase last month. Three notices stated that the minimum payment due on my low cards would increase from 2% to 5%. The fourth notice stated that the rate on my 9.24% would increase to 16.24%, all beginning in August.

So what has Chase done here? Well, they have now prevented me from paying more than the minimum on my high interest rate card by raising the minimum on the low interest ones. How clever of them! They have found a way to ensure more money for themselves as I was paying down the high rate card, but no longer can do that. I now will be in credit card debt longer because I’ll be accruing more interest each month…

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I AM the millionaire next door.

No credit cards, pay cash for everything, no debt, no worries, I own everything I have. The only thing I finance is my house. And I have a stash of cash the government can’t find. WOO HOO……

The car is old, and paid in full. The only other bills I have are the monthly household bills……that’s it.

I’m loving life……and laughing at those who overextended themselves. Then they blame the credit card companies……well, you HAD to have all that stuff you bought on credit, the big HUGE McMansion, the Escalade, the 50inch plasma tv, etc….SUCKERS……

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I just got a notice that one of my First Equity Cards just closed my account for inactivity. At first,
I thought it was the card that I had paid off and wasn’t using but it’s the card that I have a $500. balance. I haven’t had this card for long. I had applied for several cards to transfer balances from
a card or two that I had a higher balance. My Advanta Card account was closed as well but it was due to some reason on their end because of bankruptcy (I believe). I feel sorry for Teresa. If I were her I would quit paying on the card all together since her credit score is affected anyway. I have a good mind to quit paying on my cards as well since they are closed. I was wondering how much worse would that affect my credit score? But, I’m not sure that I’m ready to be hounded by collection agencies just yet.
My husband is wanting to quit paying on our cards as well because he says he wants us to start saving and paying cash for everything in the future. He says that he has heard other stories of people not making payments on their cards and after a month or two of delinquency that the companies are offering them a settlement for about half of what they owe. My husband says that we won’t need credit to buy a house because we will pay with cash. I’m just not ready to stop making payments just yet because I say that you never know when you might need credit (unforeseen emergencies or circumstances that could arise). I would for sure quit paying though if they pull anything on me like they did to Teresa!! Wouldn’t you all?!

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I have been beaten down pretty badly by the cards over the last few months. I HAD a good credit score, was only using about 25% of my credit limits and always paid on time. In October one bank decided to lower my limit to just above my balance. Within a few weeks, my other card issuers hit me with either limit decreases, massive rate increases or both – each one now saying that it was because my balance to limit ratios were too high. So one bank toppled my house of (credit) cards. Just when I was getting that mess under control again, the last few weeks have brought another round of rate increases, minimum payment increases, etc. Oh yeah, I was laid off from my job after 17 years of continuous work last month too. The only reason I had so many cards with balances was because I got divorced and used them to take over my share of the marital debt, mostly with low rate balance transfers. Still trying to pay my debts but it keeps getting harder, despite my spotless payment record. I may have to look into bankruptcy after all. I would write to my representatives or congressman, but I suspect Citi/Chase/BofA’s contributions mean more to them than my vote.

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