Today I applied for a new card with American Express and I was denied. I’ve never been denied in my life for anything related to credit. I checked my credit score and it’s now in the mid-600′s. I’ve confirmed that the only reason for the destruction of my credit score was that as of two weeks ago, Chase ceased providing my Credit Limit balance to Experian.

This is an outrage, and it essentially means that I’m stuck with Chase as my credit card company because they swapped my old cards with Signature cards. Ask whether the benefits of a Signature card is worth being stuck with Chase?

My Credit Reports from Experian, Equifax, and Trans Union, all listed these cards as having a Zero credit limit. I filed disputes agains both Chase and Bank of America to no avail. They say that the credit limit on my Credit Report should say Zero. However, they still contend that I have a credit limit of over $10,000.00 on both cards.

So, this brings up several questions.

How are these credit cards affecting my credit score?

Apparently, they are listed as a credit limit of Zero. So, they do nothing to raise my available credit amount?

So, I guess that cancelling these cards, as long as I owe nothing on them, will not affect my credit score?

Thank you for your time.

Physical address:

Christina Ctr
201 N Walnut St
Wilmington, DE 19801-2920

The above post is correct. Many card members throughout the industry are being changed to NPSL (No Preset Spending Limit) for the issues described above. By moving accounts to NPSL products, there is no need to send adverse action letters when credit line are decreased. The key is the following: would you rather have 15,000 in guaranteed line until it was lowered and an adverse action letter sent or the opportunity to actually take on more credit then your line is showing today. Personally, I like the idea of having the set line. Also, depending on the NPSL product it will report your credit line as the highest amount you have ever charged against the card. With our 15,000 example: lets say you put 5,000 against the card knowing you wanted to manage your credit well. The bureau for a set line would show 5,000 balance – 15,000 line (line utilization 33%). The NPSL product CAN show 5,000 balance and 5,000 line because that’s is the largest balance you have been cleared too thus (line utilization 100%).

Do not get me wrong there are definitely some benefits to NPSL products and if you are a heavy transactor (5,000+ a month) its a great product, but if you are frugally managing your credit card debt then its probably not for you. As all materials for NPSL products state: No preset spending limit does not mean there is no limit. Be careful out there.

I am checking out this feature with a friend of mine who actually works in the Chase credit card department and will keep all of you posted on this.

Mr CC

The whole reason for this is that consumers are defaulting on credit card debt at increasingly higher rates as they hit upon hard times in this economy. This is a way for Chase to lower your limit while masking it as an improvement. If Chase sees that you lose your job or that you’ve been hit in some other way, then might decide to deny a $700 charge for a new TV, for instance (although I would agree that if you are having hard times, the last thing you need is a new TV!)

Ultimately, the change is that instead of you having access to a constant fixed amount of credit with no questions asked, you are now effectively taking out a loan for every transaction, which Chase will then evaluate. I plan to opt out of this “upgrade” because it means that I can no longer depend on having access to an explicit amount of credit.