Credit card canceled without warning?
Has your credit card been canceled without warning or for no apparent reason?
The Associated Press is reporting that consumers across the country have been reporting such problems, specifically with bank MasterCards that are co-branded with oil companies.
Citibank confirmed the practice, AP reports. Citi said in a statement it “decided to close a limited number of oil partner co-branded MasterCard accounts.” That includes Shell, Citgo, ExxonMobil and Phillips 66-Conoco cards.
No law, AP said, prevents banks from closing down credit accounts without warning. Credit card issuers all maintain the right, typically listed in the fine print on credit card agreements.
Have you experienced this? Should the law be changed?
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139 comments Add your comment
jennifer
October 20th, 2009
3:59 pm
I can cancel my credit card at any time. Why shouldn’t they be allowed to do the same? The last thing we need is MORE government interference in private enterprise.
Chuck
October 20th, 2009
4:05 pm
I had a Wa Mu card for years. As soon as Chase bought them, card canceled. Never late, over the limit, and I have a great credit score. makes no sense.
AH
October 20th, 2009
4:05 pm
But they owe me that card it’s mine
stace
October 20th, 2009
4:06 pm
Sure, my credit card cancelled me for not using it. Thats ok, I tore up the card and got one from another back. No harm no foul. If they dont want me to have their credit card then why should I care. I will just take my business elsewhere. I never used them anyway.
Im with ya Jennifer. Keep the government out of my private business.
Chris
October 20th, 2009
4:08 pm
Jennifer, I agree with you overall…But the problem with the bank cancelling a credit card is that, if you are one of the type to not pay your cc in full each month…When cancelled (with no advance notice from the company)the balance is due IN FULL. This can really through some folks into financial upheaval.
Scott in Atl
October 20th, 2009
4:08 pm
it seems that the general public is as ignorant and uninformed as ever. What ever happened to reading contracts before you sign them? Or is it the big corporations fault too that the contracts are too long and the fine print too small?
True
October 20th, 2009
4:13 pm
@ Jennifer, that is true that you can cancel your credit card at anytime, but you have to inform them that you want the card cancelled. They problem with this is that the credit cards were cancelled without notification. It seems that it is a legally binding practice but do you think that this is fair? What if someone had an emergency and was depending on that card?
On a side note to everyone out there reading this, please take the time to read all your contracts before you sign on the dotted line. This includes myself because I know I don’t read over every single thing as carefully as I should. This situation seems unfair to me, but unfortunately there is really no leg to stand on with this clause listed in the contract.
Fred
October 20th, 2009
4:13 pm
Cash…..it’s the only way to go.
Lola
October 20th, 2009
4:15 pm
Chase cancelled my Visa because I had not used it in a few years. But losing that $9,000 line of credit doesn’t look too great on my credit report. I called and asked why they would cancel my card without giving me a chance to decide if I wanted to use the card or not, and they said that was not their policy.
F. U. Citibank
October 20th, 2009
4:16 pm
Sure, the taxpayers bailout Citi to the tune of $320 billion. And Citi fires back at the taxpayers with anti-consumer contempt.
F.U. Citi
If the government wasn’t in Citibank’s business, there wouldn’t be a Citibank. Citi should not be spitting in the face of the citizens who financed their bailout.
DG
October 20th, 2009
4:17 pm
I’m confused. They won’t let me cancel a card if there is a balance but they can???
Disgusted
October 20th, 2009
4:17 pm
The problem? For the consumer, it’s likely a reduction in the credit score, and for no debt-related reason. Part of the credit score is the ratio of credit line to credit used. A reduction in the total credit available invariably results in an increase in the debt/credit ratio and a decline in the credit score. That’s why a cancellation can be adverse for a consumer, even if that consumer has met all repayment terms. And going for a different credit card won’t help. Your credit score gets marked down every time you apply for new credit or even a new insurance policy. Every time you initiate a transaction requiring a credit check, you nick your credit score.
Nick P
October 20th, 2009
4:21 pm
@Jennifer…you can close your accounts…with the FULL knowledge that it may affect your credit score and rating. When banks do that…they hurt you…because your available credit goes down which factors into your credit score and rating. You think that exercising free private enterprise?
mc
October 20th, 2009
4:21 pm
The problem with “reading contracts before you sign them” is that almost all credit cards are run by just 2 or 3 companies and all have almost exactly the same contract. Antitrust laws, anyone?
AH
October 20th, 2009
4:21 pm
The borrower is a slave to the lender… end of story.
Winston
October 20th, 2009
4:22 pm
To Jennifer et al. who say yes because of some fine print after years of being a faithful customer they should just cancel you, I say think again. First of all it adversely affects credit rating by arbitrarily by increasing ones debt ratio. More importantly, no ones travels overseas or far distances with wads of cash so how would you feel if you were overseas and are ready to pay a hotel bill and all of a sudden you card declined?
Green Machine
October 20th, 2009
4:24 pm
Let them take them all…it is time to GO GREEN and stay GREEN!!! I love Ben Franklin’s Century card the best anyway! Just keep in God We Trust.
Kevin
October 20th, 2009
4:31 pm
MC, no they’re not. Quit spreading mis-truths.
Don’t have debt, and you don’t have to worry about credit scores. It’s that easy. If we all lived within our means, we could truly cripple the credit card companies. But that would mean we do without, and that’s not how we roll.
Ms Dee
October 20th, 2009
4:36 pm
Surprise to see this article I thought it was just me. My Discover Card was cancelled couple months ago. I had no balance on it waiting for the holidays. So are the credit companies targeting people now for not using the cards on a monthly basis for the high finance charge?
Dave Ramsey Fan
October 20th, 2009
4:37 pm
As Dave says…Debt is Dumb! Cash is King! If you never need credit who cares what your credit score is!
True
October 20th, 2009
4:39 pm
@ Kevin, you are not totally correct either. Credit is used more than you think. Two major things that come to mind are insurance and even some employers are looking at credit. I should know, I work for an insurance company that does both. Now you might say if you never had credit, in turn no debt, then you should be okay? Not exactly. Even no credit history can adversely affect a person.
Jenny S
October 20th, 2009
4:39 pm
@Kevin – Amen!!!
Nikole
October 20th, 2009
4:43 pm
Credit is necessary even for people that live within their means. I am a teacher and I would like a house. Are we suggesting that I save up until I can buy a house outright? It is unfair to negatively impact my credit by canceling a credit card when I have not done anything to deserve it. Perhaps the way credit is determined should be modified.
Marcos
October 20th, 2009
4:45 pm
Not mentioned is what happens to your credit score when you are canceled? I imagine Equifax would drop you quite a few points!
Debit free
October 20th, 2009
4:46 pm
The credit card companies take on a lot of risk and in a struggling economy it only makes sense for them to limit their exposure. They are experiencing higher default rates than ever before and with unemployment not improving at the moment I’d say they are going to continue to drop customers. It may be painful to some, but being forced to live with in your means due to lack of a credit card is a good thing in the end.The shocking thing to me is that some actually think they are entitled to these cards as if it were a constitutional right.
Cash is King. Credit cards are merely an invitation to go into debit.
Joe
October 20th, 2009
4:48 pm
Is this a news story, a column, or a solicitation?
J-Lin
October 20th, 2009
4:48 pm
I hate folks that say keep the government out of this, keep the government out that. I guess they prefer to get screwed by some entity’s who’s main goal is to make a buck no matter what.
I bet Jennifer doesn’t even have a credit card and knows nothing about her credit score. All she’s knows is the rent is paid every month on the double-wide.
Disgusted
October 20th, 2009
4:49 pm
Just try renting a car during a trip without adequate credit. And if you’ll look at one of your credit reports, you’ll see that many types of companies are checking on your credit without your permission–mortgage firms, credit card companies, insurance companies, etc. Your credit score even figures into how much you are charged for insurance. So this “just live on cash” line is simplistic, to say the least. If you decide to ignore your credit score, you’d better have a ton of cash available.
Mike M
October 20th, 2009
4:50 pm
Hey Jennifer, if we had some REASONABLE regulation in the banking industry, we wouldn’t have had the financial meltdown we just went through. So some government “interference” is necessary to curb the greedy. Oh, and by the way, my finance’ just had her Bank of America Mastercard cancelled without notice. The reason: inactivity–she hadn’t used it in a while
David
October 20th, 2009
4:51 pm
Agree with Jennifer – it’s a signed mutual contract with the credit agencies. If you don’t like the terms, don’t sign up. YOU DON’T NEED A CREDIT CARD! Listen to Dave Ramsey and learn how to live without one.
Steve
October 20th, 2009
4:52 pm
I canceled all my cards and I put them all on auto pay thru my bank. I use cash to pay for everything I need. The credit card companies were worried about my credit score during my conversation process to close my accounts. I said ” I want my score to match my soon to be balance 0″ . Cash is King.
J
October 20th, 2009
4:52 pm
This didn’t happen to me, but the law should be changed so that there’s at least a 30-day period between when the COMPANY cancels a card and when the balance is due in full. If the person fails to pay after that 30 days, then it’s in the company’s hands, but if the balance is due in full at the time the card is canceled, and especially with no advance warning from the company, then that definitely can disadvantage some people who may be relying on that card for gas expenses or some other emergency.
I don’t have an oil-company-connected credit card, so I’m not sure what the contract between the company issuing the card and the cardholder might say, but be sure to read the contract to make sure that there aren’t any provisions in there that may disadvantage you unnecessarily. If there are, you might want to look at another credit card company.
And True is right – I don’t technically have a credit card that’s solely in my name, so I don’t HAVE a credit history; I hate the credit card I do have, and don’t really see the point of hassling with a credit card when I budget each month. BUT because I don’t have a credit history, I can’t rent an apartment without a cosigner, places are less likely to give me credit when purchasing something, and my student loans aren’t nearly as good as they could be because I have no history of paying down a debt. It’s a rather complex situation – bad credit is bad, but no credit isn’t good either.
Moshel
October 20th, 2009
4:52 pm
The CC companies are doing this because the laws are getting ready to change. Every one of my credit cards informed me that my interest is now going up and changing from a fixed rate to a variable rate! This is crazy! Always pay on time, more than the minimum, never ever late, good credit…..It’s affecting everyone; just watch for more changes before 2010 law takes affect. So much for this law protecting the consumers….it’s ruining everyone’s credit!
michael
October 20th, 2009
4:53 pm
Chris,,,,that is not true . if they cancel your card you DO NOT owe the full balance at one time.
GA Girl
October 20th, 2009
4:54 pm
Dave Ramsey has also filed bankruptcy so he got a fresh start. This will force people to file bankruptcy and then the credit card companies get nothing. There’s my bailout back at ya!!
Debit free
October 20th, 2009
4:54 pm
And there are other ways of getting, maintaining and improving your credit sans a plastic card. I.E. small personal loans, car loans and of course just paying all your bills on time. As far having to pay more for insurance because of lack of credit it is easily offset by not paying the exorbitant interest rates and fees of these cards.
Noah
October 20th, 2009
4:56 pm
If they cancel your card the balance is not Due Now as stated above. You can still make payments to pay it off.
MM
October 20th, 2009
4:57 pm
Wrong Chris I work for a cc company when the company chooses to cancel the account the balance is not due IN FULL upon cancelation, you are still able to pay the balance over time as long as you pay as agreed.
smitty
October 20th, 2009
5:00 pm
Michael is correct!! If your card is cancelled payment IS NOT due in full immediately. No futher credit is extending, but the cc company still wants your interest!!!
Tarheel
October 20th, 2009
5:00 pm
It does not seem fair in this economy that banks, etc. can cancel the card of a good customer for no logical reason. However, if the customer chooses to pay the balance and cancel the card, it then is negatively reflected on one’s credit rating. Clark Howard says to keep your cards active but only charge once or twice a year. Not everyone can afford to pay off the balance monthly, especially in case of high-cost emergencies, etc. It used to be one needed a good credit score for home buying, etc. If all our credit cards are cancelled, then what???
Deacon Meyers
October 20th, 2009
5:00 pm
To Bad the Credit Cards Companies are cancelling the credit cards. Remember, God wanted good little Christians to apply for a much credit as possible. Afterward, you need to max out your credit card and any line credit to enjoy life until THE RAPTURE. We can have those Liberals Hippi pay high rates when THE RAPTURE take all the God Fearing Christian to heaven on judgement day.
Remember, Reverend Joel Osteen wants live life of luxury until Judgement day.
Sandra M
October 20th, 2009
5:00 pm
I agree with Disgusted. Credit cards are unfortunately a necessary evil. You need at least one. It would be great however, if the credit reporting companies stopped dropping your credit score if a creditor dropped you through no fault of your own. I have a Citibank card and just received notice that my rate is going up to 29.99%. I hope to be able to pay it off before it goes into effect next month. I intend to keep it open and active with minimal charges because I believe that in about a year, Citibank will be changing its rules again, especially for people who’ve never been late, and will probably drop the rates.
Seriosly?
October 20th, 2009
5:02 pm
If you’re not using the card and it carries no balance, why should they continue to do business with you? It costs them money just to keep that inactive account open. And they don’t make you pay the balance in full unless it AMEX.
Noah
October 20th, 2009
5:05 pm
Ga Girl — Why would it force someone to file bankruptcy on debt that is unsecured. So someone will lose their house and everything just because a credit card is closed. The person still doesnt have to pay the CC off any sooner then they would have otherwise.
bumpers
October 20th, 2009
5:06 pm
Had chase card then country wide bought it.soon after that the card canceled .I called them, always pay on time and way more than the min payment but they did it anyway I was a “credit risk” again not even close to the limit always on time and more than the min paid. What I got in return for being a good cust was canceled and a higher apr which is not ajustable because the card is canceled .I smell something funny going on here
Nique
October 20th, 2009
5:11 pm
Sandra M You do not need ANY credit cards anymore. Cash or Debit cards are enough for ANYTHING you need to do. Its called BUDGET and live within or below your means. A Debit card will get you anything that a credit card will get you but you pay cash instead of relying on debt.
GA CCs Yes, Debt Zero
October 20th, 2009
5:15 pm
For @Debit free, I think you mistyped your name and it should be “debt” free not “debit” free. If you pay for everything in cash you are likely using your Debit Card frequently.
Anyone who has credit cards and never has a balance, like myself and spouse, paying more for insurance (due to credit a low score) will always be more costly than having a great credit score and lower insurance payments. There’s nothing to offset that higher cost.
Those out there with credit cards being canceled, I feel for you. Not everyone has the same reasons for not using a credit card. We had one credit card that was never used and we had just been too lazy to close it, however Citi “kindly” closed it for us. We received an explanation letter in the mail about 45 days prior to the card expiring. This mailing looked like a normal credit card application mailing. It explicitly said that the card was being closed because it had no activity. If I remember correctly it also had a comment that this would be a paper mailing and an e-mail to ensure communication.
I would suggest to everyone that all mail, even if it looks like trash, is at least opened and glanced at before trashing. There was an article recently on WSJ that people were unaware of interest rate changes because they throw out paper mail before reading it.
Nard
October 20th, 2009
5:16 pm
To the clueless Jennifer: stop being overly paranoid about the government. You need to be equally concerned with corporations who exploit people to make a profit. What you fail to realize is that when your credit card is cancelled your credit score takes a hit. If all the credit card companies did the same your credit score would be lowered and these same companies would use that to justify charging you higher interest on mortgages and other types of credit. This could destroy your ability to get credit to open a business, buy a home or car or finance and education. Stop blindly following the ditto head dogma and use your brain! Lack of regulation is whta got us into this mess!
Noah
October 20th, 2009
5:21 pm
If you have a good score having a credit card cancelled isn’t going to make you subprime. Everyone either is blaming the government or looking to it for all the solutions. If you signed up for the CC you need to abide by the terms which include the fact that they can drop you and you can drop them. Its a free market, you can fire them and go somewhere else, do it. Its time to change relying on your open cc line as a safety net anyways
Jose
October 20th, 2009
5:23 pm
Kinda would like to see it go back to the old days. Buy what you need and leave the rest on the shelf for clearance or for the dry rotting. Stores had their own local credit departments and layaways to get your purchases. People weren’t so heavy in debt either. The greed in having the best, living exclusive areas, being stuck up, wasteful, trying looking better than the next person, robbing Peter to pay Paul has gotten you into this pickle. Let them beg you to spend your money and not you be so freely with your money is the only way for them to give you respect in the future. Christmas is coming up, don’t spend nothing on nobody. You have enough junk already that you don’t need to buy anything. If you have those that don’t appreciate what you give them, let them be the first on your list of the not giving. Cash and carry is the best way to go now. Banks aren’t giving you any interest on your deposits so why would you want to carry a 30% rate of interest on a credit card. I had people laugh at me and called me cheap but I am the one that is having all of the fun. When FICO came along, that’s when the credit issues went to hell in a hen basket. It gave a business a reason why they should charge you more on interest. Instead of you all fighting back then, they increase credit lines to offset that. Now, you have higher interest and no credit line. What will you do now? Bite the bullet and start paying all of that crap off and not let it back in your pocket. I have always said that the only thing that is in my back pocket is my ass. It’s only up to you if you allow them in your pocket. Having good credit, they treat you worse so don’t feel bad if you have bad credit because you are still special and it isn’t the end of the world. Life goes on and just enjoy it.
Misa
October 20th, 2009
5:23 pm
AMEX closed my account…I was a good customer that pif my charges before the statement was generated. The past 2 years I could only make minimum payments or every other month due to my employment situation. A letter was sent to me before raising my rate disgustingly high. I did not receive a warning or letter when the account was closed. I should be able to pay off the balance beginning of next year because my employment situation has changed. I still can’t believe they closed the account without consideration of my previous pay history.
ugaaccountant
October 20th, 2009
5:23 pm
The biggest issue here is how credit scores are determined. An account in good standing being closed should have no impact on your score. But it will.
Credit Rules
October 20th, 2009
5:24 pm
I’m going to run up huge balances on 3 new credit cards, then file for bankruptcy!!! I lost my job and have few assets, rent a house, so it’s no big deal to me!!!! Let the banks suffer for loaning me all that money! Besides, they can just get more bailouts from taxpayers!!!!! Money—it’s a nice thing to use, when you don’t have to pay it back! Big screen TV, new furniture—here I come!!
Millard
October 20th, 2009
5:24 pm
Hard to believe I am old enough to remember when there were no credit cards save for gas and department stores. The original “mastercharge” card was designed to be the ultimate get cash thingy. Prior to that you took out a loan at a finance co.or bank, and you paid cash at restaurants. I consider myself pretty savy having been in the consumer finance business, but I can tell you I have never read all the fine print. I don’t know anyone who has. Who has the time?
Most of my Parent’s generation never used a credit card their entire life. Several of them died millionaires. No surprise there.
Millard
October 20th, 2009
5:26 pm
Nard – Nothing wrong with Jennifer’s comments. If you love government regulation, keep voting for Democrats and you may get your wish.
Nique
October 20th, 2009
5:28 pm
We have one credit card and once a month we charge ONE gallon of milk on it to keep the card active and acount open and we pay for it immediately. You can have EXCELLENT credit SCORES WITHOUT credit CARDS. My DH and I both carry between a 750 and an 800 credit score. This keep premiums on insurance low. The only debt we carry is our mortgage which is being paid down as quickly as it can possibly be paid down.
ugaaccountant
October 20th, 2009
5:28 pm
Jose and others – This all comes back to the one thing 99% of people can’t afford to pay cash for, houses. If people have their credit scores lowered for no fault of their own, as this article clearly states, then they will have unreasonably high mortgage rates. Homes are a huge part of any economy, and if people can’t gain access to loans to purchase them then we will just sink further into recession.
ugaaccountant
October 20th, 2009
5:30 pm
Well “nique” it sounds like your credit score in part is determined by your credit card. Otherwise, why would you be playing games with it like you do?
itsme
October 20th, 2009
5:30 pm
I never wanted my gas card to be a bank card in the first place. I use my gas card as a gas card (pay balance in full every month), but I never use it as a bank card. When I want a bank card, I’ll get a bank card. However, I certainly do not want the company to cancel and affect my credit rating. That’s not right.
Derek
October 20th, 2009
5:30 pm
The banks have the right to cancel credit cards at any time, but after most of them received the Federal Bailout then it’s a disgrace that they took Americans money for their gain and now telling regular Joe to go you know where. In light of this, the major companies should be fined penalties so high that they all go out of business. I’m sick of companies using the goverments money for personal gain and killing off consumers.
Bill
October 20th, 2009
5:32 pm
As Dave Ramsey says, keeping credit cards is like playing with snakes – you are going to get bitten! Cut ‘em up, act your wage and tune into Dave – it will change your life! It changed ours!
Chris
October 20th, 2009
5:45 pm
Paid off Discover card 2 weeks before vacation. Got letter in mail one week later that card was canceled. Took 4 more weeks to get an explanation. They stated that they closed a number of accounts due to a shortage of cash flow. Really ticked me off. Not enough time to get another card. Had to overnight a payoff on my visa before vacation. No warning, no phone call, no boo, dad gum ya, or nothing!
contractor
October 20th, 2009
5:47 pm
I have a Citi MC/Home Depot Business Rewards card that will be cancelled at the end of this month.Citi explained that they will no longer have it for Home Depot. I will sorely miss my 3 points for every dollar spent at Home Depot.
Bud Flu
October 20th, 2009
5:47 pm
F— Dave Ramsey, Clark Howard, etc. Go watch one of Byron Dale’s lectures on youtube.
maybe
October 20th, 2009
5:50 pm
I was contacted by Chase about one year ago stating they were going to close my acct if I didn’t use card w/in 45 days. Apparently I hadn’t used it since ‘97. I bought some shoes, paid it off and have been doing this with all 3 of my cc since using one of them each month. I did get a letter about the interest rate going up but as long as I pay it off every time I use it the interest rate doesn’t really matter to me. But in the event of an emergency I like to know that I have it and sometimes a credit card is needed for hotel reservations, etc. I know that cc are better to have if there is a dispute versus debit cards. I’m not sure if the statement made about every time someone (even without your permission) checks your credit that it hurts your credit score. We froze our credit about one year ago and unless we already have credit with a company no one can check our credit and it has dropped all solicitations in the mail.
Not for the Ignorant
October 20th, 2009
6:05 pm
What’s funny is that those of you touting “Cash is King” don’t apparently realize that even the most wealthy a)carry debt, and b)have a line of credit.
Having credit requires that you be a grown up. If you don’t know how to manage money, you are right, stick to nickels and dimes.
Anyone who thinks that credit is not necessary must obviously reside in the Third World. We, in America, live in a capitalist society, a society home to entrepreneurship and ingenuity. No capitalistic free market system would ever make it without credit.
ihorizon
October 20th, 2009
6:06 pm
WOW!!!! Darn if I do, darn if I don’t is what I am feeling about banks and credit cards nowadays….it was nice to have to be able to borrow loans to buy a home and cars but it is about credit scores this and that!!! America was blessed with the gains of its nation, but now it is sadly going the opposite direction!!! I think the nation needs a revolution!!!!! And pray to the LORD above for more blessings as we will all need it more than ever to support our tithes!!!
Elliot Garcia
October 20th, 2009
6:09 pm
What a bunch of condescending punks on here. I travel overnight for my job 3 days a week. Do you think I should just pay thousands of dollars in cash out of my own money to pay for hotels and rent a cars and then wait 2 or 3 weeks for my company to reimburse me? It would be a lot better to put those charges on a credit card and then pay the bill in full when my expense check arrives….
Yo
October 20th, 2009
6:10 pm
They can cancel mine & and cash is a way to go.
Stat Man
October 20th, 2009
6:10 pm
It’s not the most economical way to go, but pay the annual fee and get an American Express card if you qualify.
So many of the pains I hear about bank cards, I never have a problem with. My payments are posted IMMEDIATELY – and I get an e-mail when they have received the check. I have no worries about getting cancelled and like most of the posters, I pay off every month. The benefits are well worth the small annual expense – at least to me.
Yo
October 20th, 2009
6:11 pm
Let the banks come to me and beg for money and I will cancel them.
Jose
October 20th, 2009
6:13 pm
To be truthful, the economy started to tank in 2000 from the inflated tech stocks. Housing prices started to go through the roof then and kept going up. In neighborhoods that value were only $50K start selling for $100+. Up until this time, banks were very tight on housing and their values in the communities. When the war came along, the only thing that was going good for the economy was the housing market. Go back and listen to the news of that time. Everything was over rated and over priced but people were so in to the price rather than the value of what they were buying. Banks had a major role in this picture. When you saw people from the hood to purchase a big home, you knew something was wrong with that picture. They didn’t pay their power bills on time and you wondered how in the world would they be able to pay a mortgage on time. This scheme was successful for the banks and they moved forward to Main Street. They flooded your neighborhoods with bad loans with inflated values. You sitting there thinking that your value in your home was high and here you go out and get loans on the equity. What a mastermind plan. They lobbied Congress to get into real estate but fail. When they failed, this was their answer in getting into real estate. Now, they have the money and property and they are calling their own rules. Also during this time since everything was going up, people didn’t count on their local governments in raising their taxes, power companies raising rates, school taxes increasing, homeowners insurance increasing, cost of materials to maintain the property, etc. Everybody had their hands in your pockets. Banks gave you the money to buy the homes and a credit cards to fill them up with junk. Life was good. Or was it? You all lost your sense of reason with your finances. It doesn’t take a highly educated person to know that the banks were doing you wrong. Banks were doing this before the beginning of time. It’s just a different day with a different fool to fool in taking their money. At this point, hold on to what you feel is important to you and your family and hell with the rest. Life will be much easier for you. The people that purchased their homes prior to this period and didn’t refinance after refinancing to refinance again, gotten equity line of credit, put unsecured debt onto secured debt, or used their home as a cash cow are the ones that are sitting mighty pretty today in this economy. This is what home ownership was meant to be. I enjoy the title of being cheap but I enjoy the free and clear title better.
ihorizon
October 20th, 2009
6:28 pm
I agree with Jose, I remembered on my first home right after I married that I was giving a loan 30-yr fixed at 8% and noticed that by the time the loan would be paid in 30 years the bank would have received a gain about doubled or triple my home value whereas I then understood I could have had another house or two by giving the princinpal rather than the interest to the banks. Fortunately I sold the house to move into a better neighborhood and school district and my loan is now more in line with the value of the home with low interest rate due to refinancing.
Fine Print
October 20th, 2009
6:38 pm
If the credit card issuer (company) cancels your card, it DOES NOT affect your credit score. Only when YOU cancel the card does it change your score.
mitzymy
October 20th, 2009
6:39 pm
The credit card companies are crooks from the heart. They play with your mind. My cards have not been canceled, but they did lower the amount I can get with cash, although the credit limit remains the same. You cannot rent a car, reserve a hotel room, and sometimes get an airline ticket online, without a credit card. I try to use my debit card as much as possible, and make sure the money is there. Long ago, you could deduct the intrest on your tax return, but that was stopped, so now it is all yours. My highest intrest rate is 19.99, and my lowest of the 2 is 12%. I am working on the lowest which has a balance of 1900, with the highest balance being 4000. They can do whatever they want to do as long as they give you a notice. I am getting out of their pocket.
GA Girl
October 20th, 2009
6:45 pm
Noah, just because you file bankruptcy doesn’t mean you lose your house. Most houses don’t have an equity now that the market has tanked and therefore the trustee won’t take it. You file bankruptcy to get rid of unsecured debt. With the companies that received a taxpayer funded bailout, it’s like you are paying them twice; once with your taxes for the bailout and again in your regular payments. No thanks!
Bigrue
October 20th, 2009
6:47 pm
Each person that has mentioned the credit to debt ratio is absolutely correct as it does affect your credit score. It is not that they did it in as much as how they did it. I think it would have been a good practice to a loyal/faithful, paid as agreed consumer to at least let us know. This is what I think we are forgeting. BofA will loose me as soon as my mortgage is done. If they had told me they were reducing thier credit exposure I would have apprecited the call but the CSR rep lied and said they tried to call me after I asked how they made the decision on who to cut. They even reduced a credit limit on one of my cards saying I did not use it anyway….WOW
Ben
October 20th, 2009
6:51 pm
Typical. The government makes a new regulation, and in order to both comply with the regulation and make a profit, credit card companies have to make some cuts. And you blame the credit card companies instead of the new laws and their unintended consequences. This is another case of politicians nosing around and messing up everything for the very people they claim they are trying to help.
Let me clue you in. Corporations exist to make a profit, not to serve you. If politicians make laws that raise the cost of doing business for those companies, those companies will pass that increased cost on to consumers, not just decide to take a loss so they can keep serving you.
The only unfair thing in all this is that the credit card companies get the blame for something the government caused.
Sleepy
October 20th, 2009
6:57 pm
The more CCs canceled, the better – for both the bank and the consumer. The heck with religion, credit is the opiate of the modern American masses. (OK, credit AND “reality” TV.)
Spend less than you have, save the rest. America will become a true economic power again. The debt society is sinking us in a hurry – I want it NOW and I don’t WANT anything out of my pocket. Bloody spoiled brats dragging us all down.
Jose
October 20th, 2009
6:59 pm
The shorter the mortgage period that you take will be better. I wouldn’t take a 30 year note even if it was at 1% rate of interest. The quicker you get them out of your pockets, the better that you will be. Credit card companies fear that consumers will run up debt and not pay. This is the reason why they are closing accounts. Their stocks have taken a dive since of their high default rates are being posted. You may not be in default but it will cost you still if you are doing business with them. You are better off getting another credit card with a bank that is performing according to the Feds. You can check your bank’s rating. Do business with people that are going to treat you with respect no matter what. Tough times doesn’t last forever but how you treat your consumers doing tough times will determine rather or not you will be around when better times come back. I always say that if you have to treat somebody wrong, it’s a matter of time that you will treat me the same way. Just like this economy, it ran out of people to fool or they couldn’t play the game any longer of taking people’s money. Before it’s all over with, the credit card companies will have to come back to being reasonable or they will be out of almost everybody’s pockets. Trust is priceless and when you don’t trust your bank any longer, you won’t do business with them even if they gave you a gold bar.
Martin
October 20th, 2009
7:05 pm
If this scares you, it’s a sign that you have got money problems.
NewsFlash: Available credit is not the same as cash on hand.
Katie
October 20th, 2009
7:19 pm
If it saves me from paying a high interest rate on my cards then I have no problem with it. They should also look at spouses of people who have claimed Bankruptcy and have had foreclosures. It will only be a matter of time before those people go bad as well.
Larry
October 20th, 2009
7:22 pm
Credit is not a good thing…it means you are in debt!
If you can’t buy it, don’t get it!
Ever thought how much a house would cost if there was no such thing as a mortgage? A whole lot less!
Free yourself and live debt free!
Donna P.
October 20th, 2009
7:24 pm
Like “Chuck” above, my Providian/WaMu/Chase card were canceled for no reason. I called them and asked why since I was never late and I had no balance on them (both cards had $5,000 and $6,000 limits respectively), they said I was a credit risk since I could run up my balance to the limit(s) at any time. None of my other cards are even close to my limits and I have a credit score average of 790. It looks bad on my credit report which I have had since 1987 with my first car loan that they closed my accounts. It sucks when others ruin their credit and it affects people like me with good credit!
Michael
October 20th, 2009
7:28 pm
All credit cards should be canceled but the bloodsucking banks won’t do it. If there were no credit cards people would think before they buy and prices would stop going up since there would be a natural ceiling on how much we could buy. Anyone heard of the real estate bubble built on easy credit? (Disclosure — I’m a bankruptcy lawyer who loves sticking it back to the banks Call 1800-screwbanks).
Jose
October 20th, 2009
7:37 pm
This generation of bankers, CEOs, CFOs, investment bankers, and Wall Street were more evil than the character named Mr. Potter. They really knew who hands to gease, who to keep quiet, and who to destroy at the expense of the American people. If you have money problems, then I have them too because I am going have to kick in and pay the increase difference. Just because somebody is in default doesn’t make it okay for me. Chase call this market conditions to raise the rates. Forget having lower balances, no balances, paying as agreed, paid in full status, or a high FICO score. It doesn’t matter to them. As long as FICO exist, we all will need credit scores to function in this financial market. You need them from water bills to housing. For the ones that are on the wrong side of the eight ball, there are sunnier days ahead. Just hold on. Mind over matter and it doesn’t matters anymore, just hold on to what’s important to you and your family.
dan
October 20th, 2009
7:54 pm
Yes, my Bank Of America card was canceled. They said that I had too much credit. I used the card every day, never late, and paid my balance off monthly. I guess they were not making much money off of me.
rdh
October 20th, 2009
7:59 pm
Here’s the problem: When banks cancel your cards, they are no due immediately. What it does do is to raise your debt to credit ratio and reduces your credit score. Let’s say it is your only CC. Suddenly, you have debt but no credit. This whacks your credit score and prevents you from getting more credit… all no fault of your own, Then… you can’t buy anything, you can’t rent a car, you can’t reserve a hotel room, you can’t do a myriad of things that REQUIRE a credit card…. all no fault of your own,. So NO, Credit companies should not be allowed to cancel your card. They should not be allowed to indirectly hurt your credit if you have been following the rules that were set by THEM.
rdh
October 20th, 2009
8:06 pm
p.s. for those who thing that all credit should be canceled…. no cars will be bought, no hotels will be reserved, no cars can be rented. There are a LOT of things that rely on credit in our society. Without credit cards, our economy grinds to a halt, and we truly would go into a Depression. Is that what you guys want?
Even if you plan on paying CASH for your airplane ticket, hotel and rental car, how are you going to make reservations? The entire tourism industry would die. The entire car industry would die. The entire hospitality industries would die. Tens of millions of people would lose jobs without credit cards… even if all of those tabs were ultimately paid for in full each month. So the next time you think credit cards are a huge evil, think of all the people that you come in contact everyday that would lose their jobs without the ability of a customer to use his card and pay it off at the end of the month.
Drew
October 20th, 2009
8:09 pm
I’m sorry, but my two credit cards (which I pay in full every month, spending far less than my take-home pay) are nine and ten years old, respectively. Do you think I really remember the fine print that I agreed to in 1999? Every word of it? Come on. Thankfully it hasn’t been an issue for me, but hopefully I won’t have my cards mysteriously cancelled before my vacation later this week… speaking of which…
Do these “no credit card” rubes on here ever travel? Like “Not For The Ignorant” said — credit is for grown-ups. If you know how to budget, you can use credit cards to your advantage — they sure beat carrying wads of cash around, and they offer consumer protections that debit cards and cash do not. And though I’ve never tried, I imagine it’d be pretty inconvenient to attempt air travel without a credit card.
Ben is right – “Corporations exist to make a profit, not serve you.” That’s why we have a *government* – to SERVE US. Time for it to do a better job. Usurious, exploitative “contracts” are a disservice to the public, and frankly, a scourge on “capitalism” – capitalism works better on a level playing field than when the rules are skewed to favor one side or the other. Requiring advance notice of credit card cancellation is not that much to ask.
And one last point – “free markets” are a joke – without binding rules, there are no “markets” as we know them – there is predominantly chaos. Let’s see what kind of “market” system America would have with all the laws and infrastructure (courtesy “evil” government) removed. (Somalia, anyone?)
Erik
October 20th, 2009
8:20 pm
To the people who are saying that the government should stay out of their business, I want to point out that bad business is exactly the kind of regulation in which the government should be involved. Any capitalist system demands it.
If a bank allows you to build up and carry a large revolving balance that is still within your limits, and you’re performing your responsibilities by making timely payments, then the bank has an equal responsibility not to suddenly call the entire balance due. Doing otherwise is bad business; bad for the consumer and bad for the country.
After all, could you imagine the consequences to yourself (and the entire economy) if your bank could suddenly demand full payment of your mortgage, just because it suddenly had a bad feeling about you? Such outlandishness is not something that happens in a true capitalist society because there is no “free enterprise” in any system that just assumes the most powerful players always to be right.
bama313
October 20th, 2009
8:30 pm
In my opinion, there is a major drawback for me due to my current situation-I’m a recent college grad with only a few years of credit history. The longer you have a credit card open that shows you have paid your bills on time, the better credit score you have. (Well in my case anyways) For people like me and my fiance, (saving every last penny because we are trying to buy a house) having my credit card showing that I have had it for a long time with great payment history is really, really helpful. I am praying that my two credit cards do not get canceled bc I have really worked my ass off for many, many years to make sure they are paid on time w/ no revolving debt. (when you are in college working for practically nothing and then living off of an entry-wage salary while trying to pay off student loans this is quiet a hard task!)
Jose
October 20th, 2009
8:38 pm
In a bad economy, eveybody is worrying about a FICO score. The hell with it. If a business needs your business to stay open, they will accept your cash or any other method of payment. Here’s the problem. Credit card companies force businesses to do business this way. They only way that they would accept your payment is through a credit card. I simple refuse to do business with those types of business and I am not broke or high in credit card debt. It’s your choice in the way you are going to spend your money. If they won’t take your method of payment, then that’s more money in your pockets. Hotels and car rentals are hurting for business. We fail by letting big business tell us how they are going to take our money for their under valued services and faulty products. No, you tell them how you are going to pay or let them take the highway for a change. Business doors are opening and closing everyday, just pick the ones that are going to do right by you and your family. Just because you have an account with them doesn’t mean that they own you. They allowed credit card companies to dictate how they do business for their consumers, now it’s time for the consumers to dictate how they are going to do business with them without the credit card companies. If this game doesn’t change, our kid’s kids will be in the same situation like we are in today with big credit card business. FICO doesn’t want you to have no debt. You are unknown and not credit worthy without FICO scoring. Been there, got rid of credit cards debt when we couldn’t add the interest to income tax return. So for those ones that are thinking debt free, well you are fooling yourself because you will pay more without a score. Had to work back to a score after decades of freedom. A little old school. Save and pay for what you need and finance the big things like a house and a car. They weren’t making money this way off people like me so that’s why the credit cards were push so hard into our financial world. This is a money game and if you can’t keep up, then you will be jack.
Fine Print
October 20th, 2009
8:40 pm
You people can’t seem to listen so I will yell … A CREDIT CARD COMPANY CANCELLING YOUR CARD DOES NOT AFFECT YOUR CREDIT SCORE. There is something else that is causing your credit score to be lowered but that credit card being cancelled is NOT the problem!
BravesFan79
October 20th, 2009
8:43 pm
I did a focus group for a credit card company a month ago… and they said in the future… there will be NO cards that dont make you pay a annual fee.
They are trying to instead offer gimics and promotions like frequent flier miles…travelers rewards… etc.. I think this is a TERRIBLE thing! Screw all the free promos that im not going to use anyways!
Especially for someone like me that just uses them for emergencies like if im going a few weeks bt pay checks.
BCATL
October 20th, 2009
8:49 pm
I think someone needs to remind Jennifer that business involved ITSELF with government first, and Citi was one of the worst offenders.
How soon we forget. About a year ago now, these banks cam CRYING to our government (meaning us) for a bailout, and we were stupid enough to give it to them.
So, since we saved these banks, we certainly have the right to regulate them to the hilt, and we should. They’ve wrecked our economy.
Boycott Chase!!
October 20th, 2009
8:49 pm
I had a WaMu card for a long time. Shortly after Chase bought WaMu, they cancelled my card. I had just refinanced my house, and completely paid off the card. I had always made my payments on time, and I always paid a lot more than the minimum payment. They gave me No notice. I went to use the card one day and it was declined. I was furious! When I called to find out why my purchase was declined is when I found out my card was cancelled. They tried to tell me they had recieved a bad credit report for me. This was a flat out lie! I had just refinanced my house so I knew what my credit score was at the time. It made absolutely no sense. I will never do business with Chase…EVER!!!
Nard
October 20th, 2009
8:54 pm
Fine Print: you are totally uninformed on this. A CREDIT CARD COMPANY CANCELLING YOUR CARD DOES AFFECT YOUR CREDIT SCORE. It increases the percentage of credit you are using (i.e. total balances/total available credit). Try reading this article to learn something before you post an ignorant comment: http://money.cnn.com/2009/08/24/pf/credit_score.moneymag/index.htm
Jay
October 20th, 2009
8:59 pm
I received a letter from citi yesterday stating that they are changing the rate on my plat. MC. The current rate is 5.9% they are changing it to 29.99%. Citi was kind to give me the choice to opt out of this change but if I opt out I will no longer be able to use the card. If I choose to remain in the program, I will receive 10% credit each month I make a min payment at 29.99% (for the record its not a gas card, I have never been late, I have always paid more than the min, and I received the card 3yrs ago).
GO CITI….I!!!
Glen
October 20th, 2009
9:00 pm
We canceled all our credit cards and sent them into Dave Ramsey’s show for destruction! We will NEVER have a credit card again. They were poison to our finances, and given the way the banks are behaving now, we are SO glad to be credit card free!