Your Credit Card Company Could Unexpectedly Lower Your Limit
by Connie BrooksWell folks, the economic crisis is starting to trickle down in a myriad of small ways. Banks have been hit especially hard, and many of them are tightening up in unexpected areas.
Several major credit card companies, including American Express and Bank of America have started reducing the credit limits on some of their customer’s credit card accounts – without warning.
The hard facts:
- Credit Card delinquencies are up 12% this quarter
- Credit card companies are beginning to cut back their approval rate for new lines of credit.
So, what does that have to do with your credit card company lowering your limit? Well, things are getting tight – very tight everywhere. Especially for banks.
There is a an overwhelming aura of fear in the financial market right now – anyone with a TV can tell you that. Lenders are beginning to decide that maybe they have been too generous with their offers of credit. And now, more than ever, banks are short on capital.
So they are reducing the available credit for many of their customers. It’s not just customers with low credit scores either. People with credit scores of 720 and above are still being affected. Business credit cards as well as personal credit cards are suddenly on the chopping block.
In a recent report by Javelin Strategy and Research (an advising firm for the financial industry) they found that 62% of credit card companies have cut back lines of credit to their existing customers. Sometimes reducing their credit lines by as much as half – that’s huge.
Can you prevent your credit limit from being reduced?
Not really. I wish I could tell you that you could, but at this point, you probably can’t fix things fast enough to sway a decision. Credit card companies are primarily going to base their decisions on several factors:
- How big your line of credit is - Banks can decide to cut your credit limit simply because they aren’t comfortable with the fact that you could call on that limit at any given time. If that’s the case, there’s really nothing you can do about it.
- Your past credit history with them - If you have made several late payments in the past, your bank could well decide that you may be able to borrow more than you can afford to pay back immediately.
- Your credit score - It is standard practice for banks to periodically review accounts, pull your credit score, and then make a decision about your account. What is happening is that a larger than normal number of accounts are being reviewed, and some of them are having their credit limits reduced based off of their behavior with other lenders, or the total amount they owe on all their credit accounts.
So, what can you do?
Keep your credit card balances as low as possible – This is one thing that will help you keep your credit score as high as possible. Also, in the event that your available credit is reduced, it will not affect your debt-to-credit ratio nearly as much as it would if you had been carrying a high balance. For more info on the Debt-to-credit ratio, you can check out our article “The FICO Score Breakdown” which talks about how your credit score is calculated.
Pay your bills on time - Again, this keeps your credit score up, and doesn’t invite trouble. Why tempt the bank to lower your limit, or raise your interest rate if you don’t have to?
Keep an eye on the mailbox - Credit card companies can make changes in the terms and conditions any time they want to – but not without notifying you first. If your credit limit is going to be reduced, or your interest rates raised, then by law they have to give you a notice of the changes.
What should you do if your credit card company does unexpectedly lower your limit?
First, be aware of the possible one-two punch - They lower your limit below your current balance. This immediately puts you over the limit. Then they tack on over the limit fees, and possibly raise your interest rates because you are now “over the limit” and in violation of your “contract”. Obviously, this would be a rare, worst-case scenario. If it does happen, call them immediately and harass them until they remove those fees and reduce your interest rate. You will have to speak with a manager.
Call your credit card company and request that they raise your credit limit again - Let’s face it, they probably aren’t going to be willing to do this, but it never hurts to ask. If you have a long, and positive payment history with them, then you are in a good position to negotiate. If they cannot raise your credit limit, then try getting them to at least lower your interest rate, or waive your annual fees.
Shop around – If your current credit card company has decided it no longer wants your business, there are still plenty of other banks out there that do! Try shopping around for balance transfer offers, or cards with lower fees that would benefit you more, or have a larger line of credit.
Lastly, keep in mind that this isn’t going to happen to everyone. It’s just happening to more people now than it ever has because the financial markets are in such a mess. Things will even out and return to normal eventually. Just look out for yourself and your lines of credit right now. Keep your balances low, and even if it does happen to you it should not hurt your credit score overly much.
If your available credit does suddenly decrease, then be sure you pull your credit score. Take a look at it and make sure that you are in a good position to apply for a new credit card before you try to replace the available credit that was lost. No sense in lowering your credit score with inquiries if that was why your bank decided to decrease your limit in the first place.
Have a question for us? Leave a comment below!
Keep Reading:
- Past Due Payments And Closed Credit Card Accounts
- Can One Bad Account Ruin Your Credit Score?
- How to Dispute An Item On Your Credit Report
October 26th, 2008 at 13:13
I have a credit card with a large balance but a very low interest rate. I am diligently working on paying it off, and will pay it off in time. Here is my question. I am concerned that the credit card company may decided to substantially raise my interest rate before it is paid off, even if I make on time payments. I heard there was a way to guarantee them not being able to raise my interest rates by closing the account.
If I close the account and make the payments ontime, would this guarantee that they could never raise my interest rate until the current balance is paid off. I am not interested in getting additional credit from them, but rather just freezing the current interest rate on the current balance. This is a promotional interest rate for the life of the loan. They say they won’t raise it as long as I am ontime with my payments, but I have heard horor stories from people saying that banks still raise interest rates even when they are ontime with their payments.
November 2nd, 2008 at 18:07
I was upset with American Express because they had lowered my limit by 75% over the past 3 months and had flat out lied to me trying to justify their actions. As a small business I have used American Express as my working capital over the past 10 years, so their reduction in my working capital was a real slap in the face and really hurt. At first I took it real personal and thought they were picking on me but have since learned that they are doing this to most of their customers. In September alone they lowered the credit limits of 20% of their card holders and day by day they are doing it to more and more. If you have some extra time and want to be stunned, Google “American Express credit limit” and you too can read horror story after horror story.
Just last night my sister went to use her AMX card at CostCo and it was denied. She got home and called American Express (1/2 hour on hold) to find out that her cards limit was dropped to $600 (just above her balance) from $16,200. This girl has impeccable credit and they did this to her. The customer service rep told her that it was lowered because of a “Public Record” input on her credit report. She immediately pulled her credit reports and found no such entry on any of the credit reports. Funny thing is that an American Express customer service rep tried that line on me too yesterday morning and I too immediately pulled my credit reports. Not finding this “Public Record” entry on any of my credit reports, I called American Express back and ask them what they were talking about and of course the representative tells me he has no idea why the last representative told me this as he sees nothing in my file like that.
So be prepared to have your credit limited dropped drastically for no reason or to have it chase down your balance with no warning. When you do call them to find out why, be prepared for a long hold time and have your credit reports in hand so that you can call them on their mistruths. It is a very sad day when the employees of an icon like American Express have to tell you flat out mistruths to try to justify their higher-ups actions. But they are only trying to get you off the phone so that they can answer the next call in the very long queue of callers wanting to know why their limits were reduced too.
Sorry for the very long rant but maybe this will save you some embarrassment while trying to use your card. It is no wonder that American Express announced yesterday that they will be laying off 7,000 employees (10% of their workforce) as they don’t want us using our cards.
November 4th, 2008 at 15:02
I recently reserved a vehicle while on a business trip. The rental company placed a reservation for the total vehicle rental amount on my American Express card. During this time American Express lowered the limit on my credit card with absolutely no reason and no prior notice. They completely disregarded the amount of the reservation that the rental car company had placed on my account.
I tried for over 24 hours to reach American Express regarding this. When I was finally able to contact someone I was told to just pay off the card and then I could use the card to pay for the rental car. After explaining just how ridiculous this statement was and “talking” to this representative a little longer she agreed to give me a temporary credit line increase. However, this increase would have put me over my limit and I would have been charged with over limit fees. I am quite sure that my 0% interest rate would have disappeared also. Not to mention the impact that would have had on my credit score.
I have NEVER been late on a payment on ANY of my credit cards nor have I ever been over any of my credit limits. Not that it is anyone’s business but the balances on my credit cards come from financing a business start up and not frivolous purchases. If it were not for that I would not be carrying balances. Additionally I always make more than the minimum payment on all of my credit cards.
In short American Express was of absolutely no help to me with this problem that they had caused through unethical business practices. I know that American Express is experiencing financial difficulty and that is the reason that they did this, however, I am an accountant that specializes in helping small businesses get through rough times. I can tell you that one thing that you do not do is turn your good clients away. After researching this on the internet I found that American Express is doing this to a multitude of their account holders with over credit scores over 700. These are good clients.
When I first started noticing the problems with the economy I did some financial planning for my own business. Not knowing how bad things were going to get, I made of list of the creditors that I would stay current and in good standing with if the economical situation became so bad that I could not pay everyone. American Express was at the top of this list. Needless to say, they are not there anymore. Additionally, I have consistently paid $100.00 to $250.00 per month more than my minimum payment and I still have a few months left with a 0% interest rate. I really hope that my $15.00 monthly minimum payment helps their cash flow situation. It makes a lot more sense to give this amount to a creditor that is still treating their good customers with respect. I will also reduce the balances on other cards faster, which is necessary, as now my credit report will show that I am using over 50% of my allowable credit with American Express which will cause my credit score to decrease.
This letter was addressed and submitted to American Express but is in a third party format as I intend to post it on every web site that will allow me to do so. American Express may not feel that it is important to notify their customers prior to taking an action that could place them in a horrible and embarrassing situation and have a negative effect on their interest rates, credit scores, etc. but my business is taking care of small businesses and individuals with financial problems and I do think that it is important.
Georgia Evans,
Professional Management Systems, Inc.
November 7th, 2008 at 09:33
Paul, my understanding is that closing such an account would allow them to call in the note, being immediately due and payable. It would not freeze the rate. I could be wrong.
I just had Chase tack a monthly fee on a lifetime promo rate. Have not been late nor overlimit. Chase was sued several years ago, lost and moved then their corporate headquarters to a less consumer friendly state.
What these credit card companies are doing should be illegal, but there seems to be too many occurences of it on the web. Illegal not only as false advertising, but in violation of truth in lending.
How very shameful of them to pretend they are going to assist people in debt write-off, so they can get a piece of the bail-out pie… while jacking peoples rates up in the shadows.
November 9th, 2008 at 21:58
I’m having problems with the Credit Card Companies, lower my credit to what I owe, and are causing my score’s to go into the tank……. I understand that the creditors are trying to protect there interest.
However they are being back by the Government, I.e the taxpayers to bail them out. I have never been late once with a payment, and/or just paid the minimum payments. I don’t have a problem with them, maybe locking you account for now from using it. But I don’t think they have right to ruin my credit score, to where other creditor’s start to follow suite, and start to lower my credit with them.
Now my score is in the tank, to where it looks like I charged up my accounts to the maximum. I would think this would be illegal for them to ruin your credit, not you ruining your credit. ……
Does anyone know of any legal protection from this?
November 12th, 2008 at 18:58
I have NEVER missed a payment to any creditor, and I am having the same problem with my high credit lines. First they are lowered for bogus reasons (AmEx said it was because Wells Fargo Mortgage holders were a higher risk…I DONT EVEN HAVE A MORTGAGE WITH WF!!!!) They lowered my credit line from 30,000 to 20,000, initially, and now lower it every few months by a few thousand dollars, which dropped my credit score significantly. The other companies were not far behind, causing a domino effect…When Bank of America sent me notice that they were lowering my credit line from 20,000 to 6,000 and I called to ask why–they said it was because of my “payment history”. In 15 years of doing business with them I have NEVER missed a payment, but I was told my account was “FLAGGED” because I made a MINIMUM PAYMENT (It was on auto-pay default, because I had three surgeries temporarily limiting the use of my hands…so I set up all of my accounts this way for a few months as I recovered) After I explained this to them, they CLOSED both of my accounts with them because I was temporarily disabled. Since then, one account after another has been closed-most due to inactivity because I have paid off most of them years ago , but since I heard it was not good to close inactive accounts, I left them open showing active/paid in full/paid as agreed/never late… When I pull my credit report, it shows ALL ACCOUNTS in GOOD STANDING-NEVER LATE-PAID AS AGREED…If this is how they are treating GOOD customers, imagine what is happening to those who have an occasional blemish on their record! My credit score has gone from 810 t0 680 in the past year, and to this day, I pay ON TIME, OVER MINIMUM PAYMENTS, AND I HAVE PAID OFF SEVERAL ACCOUNTS AND INCREASED THE AMOUNTS I PAY TO SEVERAL CREDITORS AS EACH ONE IS PAID DOWN OR OFF. There is no reason for them to expect that I would be a risk except by their own actions, and I am FURIOUS that I have worked so hard to maintain excellent credit over the years so they can come along and ruin my credit because they are freaking out about the economy. This whole situation is literally making me ill, and worst of all, there seems to be NOTHING I or ANYONE else can do about it.
I contacted all the protection agencies and complained, the Atty. General’s Office, and even the ACLU; and have learned that I am absolutely powerless. I would not ever have dreamed of ruining my own credit; but it looks like I will never even have the chance; The credit industry is doing it for me!! It was suggested to me by my financial advisor that I file bankruptcy–because either way, my credit is ruined. At least that way, he explained, it would be by CHOICE, and the companies will get exactly what they are trying to avoid-people NOT paying their bills. By their own actions they have created exactly what they are trying to avoid. What is the next solution? A class action suit? Will we have to go to the Supreme Court? I have cut every one of my credit cards and I vow never to use any of them again. I am buying my next house with cash, IN FULL… my 2 cars are already paid in full; and I am selling my large empty-nest family home to my adult children for an investment until the value of the property comes back up to where it should be, and then hopefully they will make a huge profit on it one day…And, at my suggestion, they have all paid off their credit cards and told the companies to put their credit where the sun don’t shine!!! If we all sit back and let the companies get by with this, it would be shameful. If the only way to get them to lose their butts is by filing bankruptcy, then I believe everyone should do it? Them, or us?
November 14th, 2008 at 04:08
Marsha Carroll,
I’m in with what you say…… It’s so bad, that even if you were able to file a class action law suit, the lawyer would get all the money, and we would see only about 30 bucks, and we would still be the same boat…..
I signed up to one of those Internet “just answer” sites, and was hoping to get some answers…..guess what they got my $30 buck,,,, Then told me this was for entertainment only. I did get one response. He told me that I would need to find a “somewhat adventurous bankruptcy or consumer rights attorney. But this could also be a class action involving a very large segment of the US population, and in the right hands of the right law firm, your claim may be worth a very large sum of money.
I e-mailed back stating, this is great. These Creditors know they have us over a barrel, and that we do not have the power and/or money to fight back, Big Corporate Companies, and they know this.
I know they did not force us… as they say to use the “Credit”. But I didn’t know they had the power to ruin our credit when using it. Especially when we have paid as requested by them
November 19th, 2008 at 01:47
I just faced the same thing tonight when I went to use my Lowes card.
They has dropped my limit to what I owe. I have been with this company for over 10yrs with good credit. Now I am at my credit limit and I never use that far. I keep my limit low to keep my credit score high.
What can we do to protect ourselves.
Why should they get a 700 billion bailout?
November 20th, 2008 at 20:36
I am having the same type of problem. I received on 10/15/08 a letter from Bank of America with checks attached requesting that I use the checks to payoff credit cards for 0% until 2009 etc. I have never used the account and have been a cardholder since 2006. on 11/5 I write the check to payoff another credit card for $1,000.00 and then received (from Bank of America) a second letter on 11/10 dated 10/31 that they have lowered my limit to 500.00!. I already written the check to the credit card and my husband was on a business trip using it. Now the check came back and I have to come up with the $1,000.00 cash not to mention the bounced check fees. Bank of America says they apologize and reversed the fee on there end, but cannot increase the limit at this time. Why would you send me checks to use and then lower my line 15 days later. What can I do because this is greatly affecting my credit. Can we file a class action suit against them? And then they wonder why the economy is bad, we cant afford to buy anything. I would love to see the list of the CEO’s, CFO’s etc. getting Subpoenaed for receiving bonuses over $250.000.00 yeh they are hoardering it allright for themselves!
November 21st, 2008 at 03:03
AMEX cut my limit from $15,000 to $9,000 as soon as I made a $6,000 payment. I have NEVER been late with them and most of the time I would pay the balance in full.
Here’s the action I’m taking (1) I filed an on-line complaint with the FTC Federal Trade Commission (2) I filed an on-line complaint with the BBB (3) I am submitting a written complaint to Office of Thrift Supervision (OTS Consumer Affairs) the government arm for credit card regluations in Washington DC phone 800-842-6929. (3) I’m sending a package including all my e-mail correspondence with AMEX to Senator Chris Dodd he has introduced a Bill to reform credit card practices and protect American consumers.
I have a good credit score and what AMEX did, without notice was undeserving. I understand that they can extend credit and they can take credit away. I do not understand how they can destroy or credit scores? In my case as the rest of you, my “balance to limit is too high”…duh, when they reduce you by the amount you pay they have you in a trap. Additionally, it now appears that my credit line is $9,000 with a High Balance of $15,000 another “ding” on my score!!
It won’t matter what the government does to “bail-out” Banks, Auto Industry, etc…if the consumer’s credit is destroyed in the meantime, we won’t be able to purchase anything, that will solidify the collapse of the economy!!
November 21st, 2008 at 21:30
my story is the same as well Only my credit card company is Bank of America.
I am a good customer….
Always paid my bill…
No lates…
Good credit ( won’t be so good after this)…
What they did…
Jacked my rate from 11% to 26%
Lowered my credit line to just above my balance coincidentally the same day after I complained about the rate and made them change it back
Received letter from them that they had changed the credit line and it stated in the letter they had disussed this with me ( a complete lie )
Recieved letter on our second credit line that it was also being reduced per our discussion ( another lie )
Was told very rudely by thier credit anylist that it was because we are a “good” customer that they didn’t just close our accounts. And she stated “and we both know what THAT would do to your credit score don’t we?”
The same lady flat refused to let me speak to a supervisor though I asked several times.
That is the short and condensed version of the run around I had with them. Something needs to be done right away to protect consumers from this. I’ve written everyone I can think of.
I don’t even want to think about the cascade effect this could have on my other accounts when they see those 2 accounts now have balances to the limit.
I hate to think of the good credit score we worked so hard to maintain going down in flames. So much for buying the home we wanted in a couple of months.
November 26th, 2008 at 03:15
This is America now…….
And the “Fat Cats” in Washington don’t care….. They take our money from taxes, and then take it from us when we need it the most.
It seems Iv’e been told… they are not the one’s who ask for money, we did, and now were going to pay dearly for it. We will pay for other people’s greed..
November 26th, 2008 at 03:22
One other thing, I think we are going to pay for doing it the right way, were the others who did it the wrong way , get away with it… I wish I knew an answer for this.
November 29th, 2008 at 00:31
Well after the Government Bailed out Citi Group, i.e., “Us TAX Payers” guess what ?, Citi Group sent me my statement Today, and has decided to lower my credit limit to just $54 above what I owe. For no legitimate reason. Of course they don’t need one do they??
So now it looks like I have charged to the max again. Another ding on my credit score………. And every one I talk to, says that Lawyers aren’t willing to touch a big company, unless YOU have money.
I guess this is what you call justices…………………
November 30th, 2008 at 08:04
Maury is exactly right! I just got the same thing from Citi today. Despite years of accounts in good standing, FICO over 700, never late, always more than minimum payments and they lowered my credit limit to $77 dollars above what I owe.
What a bunch of jerks. I plan to pay this card off and cancel it immediately. I think if a lot of us did the same thing, they would get the message. Geeez!!
December 5th, 2008 at 10:13
Citibank sent me a letter and lowered my credit limit. They said that because I never use my credit limit they are lowering it from $11K to $6K I average $1,000 a month in charges that I pay off. I’ve never carried a balance; never been late. So it really doesn’t affect me, but protects the bank.
I think it is because I retired and my income is lower.
December 16th, 2008 at 17:25
My husband and I recently received a letter int he mail reducing our limit from $12k to $700 !!!! We always pay our bill on time and in full. In recent months, we have not been actively using the account (less than $100) and decided to use this credit card while on our trip to Mexico. We accumulated about $600 on the credit card, only to find out now that our limit is $700 – this i know will neg affect my credit – and I feel helpless. Our credit scores are well above 700 – and I don’t know what I can do to try to increase it without again, negatively affecting our credit score if the request is denied.
December 18th, 2008 at 16:17
I have a credit card that I paid off in full and they posted it on my statement but they will not remove the money from my bank account!!! they have rudely stated that they can leave it in there as long as they want per the terms of agreement. Is that true? Is there a place where I can complain?
December 31st, 2008 at 00:19
I just got a letter in the mail from Juniper Mastercard saying they are lowering my credit limit from $6000 to $650 because quote: “since you are only spending a small portion of your available credit”. I have had this card for 3 years with a PERFECT charge/payment record. NO I do not charge up $6000 on my card. So now they are going to start punishing everyone who actually managed their credit!
Congress and President Obama – LISTEN UP – this is ridiculous and you know it! These companies are being deceitful and they are just making the problems “they created” even worse. I know from reading on the web that this move on their part is going to drop my credit score. So IF I wanted to help the economy by purchasing one of those hundreds of thousands of foreclosed homes or a new car, it would now be more difficult for me to do so. And by the number of posts like this I am seeing all over the web – I am not the only one!
December 31st, 2008 at 15:12
Get this. I have a Juniper card that I’ve never been late with and never been over my limit. They send me out some checks at 3.99% interest if used by Jan. 17th. One of the checks I wrote was on Dec. 22nd. Yet it hasn’t posted, so i finally call. The lady tells me that my credit limit has been lowered and won’t cover the check. I should be getting a notice in the mail today Dec. 31st. Huh? Yet my current statement which is due Jan. 10th says I still have the credit availiable. Can they do this? Shouldn’t it be affective after my due date or when my next statement closes? Can I do anything legally about this?
January 1st, 2009 at 21:22
My experience with Juniper has been surreal. It pretty much encompasses all the negatives in the above posts and perhaps new ideas to further fan the flames of their greed and ignorance. Surely some of these actions are not legal. Ethics would be a water cooler joke for these guys. Bail or help them out? Shame does not exist in their vocabulary. I am going to make my experiences known to every media and governmental outlet possible. There are thousands just like us that need to quit being bullied and manipulated so a feckless Corp. we trusted and supported can “screw” us and then expect more. And how can you lose too much when you are charging nearly 30% interest. Also they won’t give you a name or officer to complain to. My visualization of one of their Board meetings would prove Curley, Moe and Larry are still alive and Mr. Ed must be the CEO!
January 24th, 2009 at 01:36
I have just gotten the rudest treatment when I contacted BofA to question why my credit limit was lowered. The person I spoke to simply said “We sent you a letter. It’s our money”. I couldn’t believe that so I immediately hung up. I called again and got another rude representative. I am so angry right now because their actions have nothing to do with my relationship with them but only what 1 person things in the back room that does reviews. You would think that they would at least contact you to understand if the information they have is correct or not.
Like many of you I am very angry that we bail them out and they treat the consumer like crap. 40 Billion dollars and they can cut the credit to people who have never missed a payment or defaulted on anything. Is there anything that we can do as consumers to fight this rediculous behavior?
January 28th, 2009 at 04:28
I am having the same exact problem. I have been a customer with Bank of America since 2001. I have two cards, 2 checkings, a savings and a student loan with them. I made a significantly large payment on my credit card in hopes of freeing up some credit and also so that I would be able to book a plane ticket to go see my sister get married in two months. The day after I submitted the money as a payment they lowered my limit about $2500 leaving $30 available for me to use. Needless to say I flipped out on them bc 1) I have never ever ever been late or missed a payment and have always paid more than the minimum and 2) bc they didn’t even send me a notice letting me know it would be lowered. The response: Oh yea well we will be sending out that letter soon. Well what good is the letter saying you are lowering my limit after you do it! It sucks that they are doing this to the people who are working hard to keep everything current. I am now closing every single account that I have with them and I will never do business with them again. I told them that when the economy gets better, which it will eventually, everyone that they screwed over in the hard times will remember this.
February 11th, 2009 at 03:12
I cannot believe that these credit card companies can get away with this s__!!! What in the world are we all going to do? With credit scores that are down the toilet, no one can buy anything (or may not even want to) to help the economy. Why support the very crooks that have stolen from us???
February 20th, 2009 at 19:22
I am glad I found this site. Reading the posts makes me feel “a little” better that I’m not alone, however I feel like crying. My issue is with Amex. I viewed my statement today on line (just printed on 2/17) and my limit was not decreased, however in the “account summary” portion, my limit was decreased by more than half leaving me with $7 of available credit to use. Now I usually do not use this card, but since it was my b-day about a week ago and I received my income tax money, what great way to continue building up my credit and just pay it off in cash by the next cycle date. Right? Well I was wrong about that!! I didn’t even receive the statement yet. (And it has the full credit limit for me to use) I just got off the phone with two different reps. My credit limit was decreased one day after the statement was issued. My due date is not until 3/14. What if I did not have an internet to see this!!! They told me do to these economic times, they made a business decision across the board and I will receive a letter soon stating why. They also explained that if ANY over the limit fees are to occur they will extend a 30 day grace period for me to pay it back…ARE THEY INSANE!! I am going to call back tomorrow to speak with a supervisor when I have time to be on hold for hours (on speaker phone, while cleaning my house). This just puts a sour spill on my weekend. I hardly even use this card and now the ONE time I charge a lot is the time they decreased it to what I owe. They should have decreased the amount years ago, when I had the card, but wasn’t using it. That would of saved them money than….I’m just rambling at this point, I’m so upset; Thanks for reading my post.
March 4th, 2009 at 02:14
Bank of America
P.O. Box 981811
El Paso, Texas 79998-9986
The above company reduced my available credit by 110000.00 Reduced limits on cards I had balances on them to the point that any charge would put these accounts into an over limit condition. For example original credit card limit was 46100.00 with 19000 owing reduced the credit limit to 19100.00 is currently 365.00 in pending charges on the account.
I have never been late and rarely carry a balance. This activity is borderline loan sharking. As the rates would adjust to the 24.99% rate vs the 1.99% rate currently enjoyed. This happened within a 2 hour phone conversation on 5 of my credit cards, 3 of which had no balance so they just closed them completely. How can a consumer react to such swift, undeserved and rash actions?
My Credit lines went from 169,600.00 to 46,400 in a matter of minutes. I have on deposit with this particular institution 140,000.00 in Cash as well as a mortgage which is not under water and never been late, or in any threat of foreclosure. My wife and I make a combined income of 250k+. This institution will be losing our business as a result of this predatory action.
Please take action against this institution!
Thank you,
Gary Rollie
Bank of America Accepted tax dollars as a part of the Tarp program!
March 4th, 2009 at 17:34
I have been a victim of all the above mentioned actions with everyone of my credit cards. I’ve never been late…respectfully used my cards… always pay balances in full. This week the line of credit on every card I own was been reduced to less than half of the original credit line.
My credit rating TANKED 169 points as a result.
I’ll be sounding like an anarchist but I figured out how to fight back in the only way I can.
I have just paid all my credit cards in full and dumped them instead of waiting for them to hurt me more than they alread have. I suggest that if you can follow suit PAY THEM OFF and the CUT THEM UP. PAY CASH into the economy.
It’s evident that they don’t have our best intrests in mind… just in us bailing them out to preserve there lavish living. If your hurting use 401K money, savings, bonds, stocks, education funds what ever it takes and pay them off.
Follow my lead. Lets get back to banks showing us why their worthy of our business! and Not the other way around. Turn the tables around. We have to get ourselves out of this mess. Stop expect the banks, the stock market or Obama’s stimulus package to do it for us. We are the answer.
March 4th, 2009 at 20:49
One of your comments here almost seems like it must be illegal, or at least should be. What happened to me was that I had a 30K credit limit, and owed a little less than that because I charged parts for my company on it. I also did that on a few other cards, because my customers were being a little late in paying me. This made me have most of my cards charged over 50 percent, which lowered my credit score, even though I was making payments on time. So they then lowered my limit to 26K, which put me over the limit and they started charging over the limit fees, even though THEY put me over the limit. So at that point I decided to pay off another 8K. The next month they lowered my limit to 17K, putting me over the limit again, and they started charging me over the limit fees again. They also raised the interest rate. I can see where someone could have a high amount on cards, and even though there are able to pay the monthly payments, raising the rate, and lowering the limit puts them in a position where they can’t pay the monthly fees, causing them to have to file bankruptcy. Someone should file a class action suit, to stop these banks from ripping people off, when they were the basic cause of the financial position of the world. This is putting a bid on people already in hot water, and making the nations problems worse. Basically, they are making us pay for their mistakes and at the same time getting help from the government, which is also our money. The vast difference between interest rates that they charge and the prime interest rate, should also be illegal, when in the beginning they were basing their rates on the prime. Even their contracts originally stated that the rates would be based on the prime. Someone, maybe even me, should stand up and fight these crooks.
March 26th, 2009 at 03:13
I’ve had the same problem with my Chase Freedom card. They lowered my credit from $16,000 to $5,000, but here’s the kicker: they had just sent me a promotional transfer check that I used that was supposed to lower my credit by consolidated a loan and another credit card to the Chase card. Although I had an adequate available balance, they rejected the check, then charged me a $39 fee and my bank charged my a $27 fee. My bank tries twice to cash the check and I assume I’ll get another set of fees. But the second time it tried to get cashed, they decided to lower my balance on my credit card on the same day – I find this extremely unethical. I have never missed a payment and use their card everyday. I’m going to attempt to harass them tomorrow, but I doubt it will do anything… except they will lose my business.
April 14th, 2009 at 04:48
My situation is basically what others have described. Except for me simply paying off the accounts in full is not an option right now.
I have gone from a credit score of 800 to less than 500 because my 4 credit cards (bank of America and Amex) cut my credit limit to almost nothing. Even though I had low balances (less than 15% of my credit amount) , always payed more than the minimum and never missed a payment.
Thanks to these criminal organization’s actions, I am now over my credit limit by thousands of dollars. My interest rate in every card is now huge, the overdraft fees are also now huge. And of course
with that kind of debt three of the accounts have already been closed.
Before, I could afford to pay twice the minimum payment (and I did) , now the minimum payment has also gone up to over twice as much as it used to be, and barely covers the huge fees!
So I am now trapped and unless I can save enough to pay the entire amount owed, I will be stuck paying these huge bills for the next 30 years.
It’s incredible that within the span of 5 weeks I went from fiscally responsible, to overwhelmed by unpayed debt. If I had known that doing all the ‘right’ things to earn and keep good credit would leave me in this situation I would have simply never opened a credit card account.
Now I can not rent a car, get a loan, and I appear as high risk to any future employer. Thank you Bank of america and Amex for robbing me of the opportunities for personal and economic advancement that I had worked so hard to earn.
April 22nd, 2009 at 10:19
I recently inquired with bank of America into raising my credit limit on one account so I could transfer a balance from another credit card. I was told the option was not available at this time. The then, although I have never ever been late ( I have two account with them) lowered by credit limit on both account to where my balance in propertion to my then creidit limit went from arond 57% to 99%. That is going to signicantly lower my credit score. My question is if you think setttling the accounts at around 40-50% on the dollar will have more of a credit hit in the next year than being at 99% of my credit limit? I am very angered by what they have done, but am not sure what to do about it. Any suggestions?
May 18th, 2009 at 17:01
I have the cabelas VISA credit card, and have for years. They raised my interest rate, and ,lowered my credit 3 months ago. I called in and was told it was beacuse of my credit score. So, I followed the instructions and got my free credit report from the same place they did. My score was 785, and when i called back, i was told that was not the score they were showing, but would not send me what they showed. I then paid off my card with them, and only used it as needed. I to, pay my bills on time, never late, and have been with them for many years. My reward, they lowered my limit again, without any notice, and it is now 3400, instead of 20,000. Is it legal for them to lower my limit and raise my interest rate without notice? I have read where they have to give notice, ahead of time. Current law states they can not make changes to your card without 15 days notice, and the new law makes them give us 45 days. They have until July 2010 to comply with new law, but still, the way i understand this, they have to give us 15 days notice before they can make changes. Does anyone here know for sure…
May 20th, 2009 at 06:41
What if we all just stop paying till they decide to correct there actions, I think it will have alot of pull if we can get thousands to deal with this. they seem bound and determined to ruin our credit anyway
June 2nd, 2009 at 12:29
The revolt is on! The minute they do something underhanded to damage your credit, stop paying them. Eventually, work out a settlement and save at least 50% of your debt (plus taxes on the amount saved). The damage a settlement does to your credit isn’t really much worse than what they’ve already done, so it’s worth saving 50% of your debt. It’s time to out-maneuver them and their ruthless practices.
June 2nd, 2009 at 22:48
I have found that the creditors will not even discuss lowering payments or interest until we are at least 2 months behind. If our credit is already shot, stop making payments for the 2 months, then as Dan said, work out a settlement and save 50% of your debt. Are there any good reasons to countinue struggling to make payments?
June 17th, 2009 at 19:36
What options do I have when a credit card lowers my credit limit, below what I currently owe, then charges me “Overlimit” fees on the balance remaining – which is over the NEW Credit Limit They changed it to!
July 5th, 2009 at 02:59
My husband’s credit line has been reduced and it is so ridiculous because he has such a satisfactory credit rating and history. Why they would give one person a specific credit line and then cut it off whenever they feel like it? The lady whom I spoke with was so mean. She was even asking where did my husband use the credit card for. I do not think it should be their concern whether the person would use the credit card for shopping or travel as long as the payment is regular and not deliquent. I would be so pissed off if we will receive a letter stating that they are giving him higher interest rates, too!!!
July 16th, 2009 at 15:32
Chase Credit Card lowered my credit limit after 36 years of perfect pay. How do I go about either joining a class action suit or starting one?
July 20th, 2009 at 10:19
Any call you make to Bank of America regarding credit card rate will not be to your advantage. They will begin by telling you “we are going to ask a few questions and this might sound like an application, but it is not”. Moments later expect to be taken down a road of prying eyes upon your spending habits regardless of your faithful, always on time credit card payment. They might even try to befriend you and guide you to a Debt management co, all the while behind the scenes they are lowering your credit limit and steadfastedly refusing to lower your interest rate. Your call will be like a day in court with Bank of America henchmen as both judge and jury….oh, goody we caught a struggling, on time customer to add to our quota for the day. Expect to be treated with more respect if you are behind in your payments, this is when they start to fret…oh, dear, we must be nice to this one….if we’re to get a penny.
July 26th, 2009 at 14:50
Well, yesterday in the mail I got a letter from both BofA and my Citi card. Bank of America said they are lowering my limit from 10,000$ to 5100$, not a big deal until you factor in that my current balance is 8500$. So now im over my credit limit immediatly and will be charged over the limit fees, which in turn will raise my intrest rate. What a crock! Im not paying it!! My Citi card has a 27000$ limit and I owe 22000$, my intrest rate has always been 7.99%, as of August 4 they are raising it to 29.99%. For what?? I never made a late payment, never went over my limits and have had these cards for over 10 years. I was thinking of refinancing my house soon but how can I do this now that my credit score will be in the toilet?? I was informed that I will be laid off next month so my income will lower than usual because of unemployment. What do I do?? Im not going to be able to afford to pay them with the higher rates and all those fees. What can they do if I just dont pay? Can they take my house from me?? Cant we do something tostand up to these credit companies?? Its just not fair. If theres a class action law siut filed, sign me up!!!
August 10th, 2009 at 16:52
Well today I just got letters for two of my accounts with Bank of America I to have been with this company for years, I had a credit line each $28,000.00 owed each account $15,000.00 each paid $13,000.00 account with my family trust. Today I get a letter saying my limit got lower to $10,000.00 due to the way the world is… I told the guy wait the big company’s took a bell out and got money and little people like me paid there bills on time and did every thing they should have done and this is how we get repaid lowing our accounts and raising our intrest rates WHAT THE HELL..
“PLEASE PUT MY NAME ON ANY THING TO SUE THESE ASS HOLES WHO TOOK TAXS PAYERS $$$ SIGN ME UP SUE THE BIG COMPANYS”!!!!!
August 12th, 2009 at 17:41
Bank of America just did the same thing to us, and my attitude has gone from one of “I always must pay my bills on time” to “They will get what they get when they get it.” I had to use a credit card to rent a car, so I paid off a large amount just for the trip. Soon after, BOA lowered our credit limit and “took” the money I had put on the card. We have always paid our bills on time, and at this moment in time I don’t care if I ever give them one more dime. If it wouldn’t trash our credit I would just let them stew in their own juices.
September 3rd, 2009 at 21:52
I am a college student and I admit that I have been very irresponsible with my finances. At the moment, I am trying to fix things and have been making monthly payments on all of my accounts. With me being a college student, money is hard to come by. I work 2 jobs now, because I want to pay my cards off. I feel it is the right thing to do.
Now, I have an amazon.com credit account with GE Money Bank. I orginally had a credit limit of $950.00 on the account. I charged it to a high balance of around $650.00 and because I knew that I wouldn’t be able to cover my purchases I sold some items and paid the cash back to my card (stupid I know, but like I said, I’m trying to pay my accounts off). Right after I paid my balance back down to $230.00 I received a letter from the bank. They told me that due to my recent credit activity they have reduced my limit to $220.00. I just made a very small payment so that my balance is $205.00. Instead of having $700.00 available on the account I now have $15.00 available. Isn’t this going to hurt my credit score? I haven’t even graduated from community college yet. With my score being lowered so much, won’t this make it hard to get a student loan when I finally have to go to a 4 year school?
I believe that this kind of activity by banks should be illegal. They reward your payments by lowering your credit limit. What a waste of tax dollars!
September 19th, 2009 at 04:07
I opened a acct from Bank OF AMerica, and I was given a limit of $9000.00 and I have never been late and I pay at least $1000.00 but my average payment is about $1250.00 a month. I have never received a bill saying my payment due was anything but sero because I pay several times per month. If I have a extra $100.00 it goes straight to the BOA Choice Platinum card. I would not have used so much of the card since January but the Dr.s who are treating my mother for recurring colo-rectal cancer wanted her to use a hidra therapy tub to increase her bloodlfow down there. I checked on Sunday Sept 13th my balance was still $9000.00 and I went to the drug stotre Monday Sept 14 and forgot my checkbook so I went online and paid back the $100/00 I spent and I paid another $50.00 Wednmesday of this week. I am afraid to keep making high payments because I am afraid in 2 or 3 months they will be paid down another $4000.00 and they will lower my credit again. It is easier to use a credit card, and I travel oftenn, meaning at least 3 days per week and the free rooms help, but I would have been in a tight spot had they lowered my credit lower than the $2100.00 I know have owe about $6700.00 and my limit is $6900.00 This was humiliating. I chgecked my credit report and my score is about 705. They offered me more cards after I got the first one and approvced me for a truck loan, but I wanted to pay them off. My home is paid for, as is my car. I get a good VA pension, I served 23 years as a Naval Aviator. I feel that what BOA did was dirty., It seemes like they tried to damage my credit. They said any checks wrote on the old limit and any authorizations would not be honored. I will stay wih my bank, and get a card and vehiohle loan from them. Thank you for this article, it answered many questions for me. I assume going to the BBB would be a wasye of time. For anyone who calls them, the reps at BOA seem to read from a pre written script as they all say the same things. They also will lie to you. When the economy is back in good shhape we should all boycott BOA. That is if they lowered your limit when you made your payments on time.
Thanks and good luck to all.
October 26th, 2009 at 11:27
[...] with their credit card companies, paid on time, but credit card issuers in this credit crisis have reduced credit limits, increased interest rates and closed accounts. There are many unhappy campers out there. But who to [...]
October 31st, 2009 at 14:55
BEWARE B OF A!!!!!! It does “hurt to ask” to have your credit limits raised.
Quoting from this article:
“What should you do if your credit card company does unexpectedly lower your limit?
Call your credit card company and request that they raise your credit limit again – Let’s face it, they probably aren’t going to be willing to do this, but it never hurts to ask. If you have a long, and positive payment history with them, then you are in a good position to negotiate.”
My experience with Bank of America today: My credit limit on a B of A VISA card I have used for 15 years was $21000. They recently lowered it to $7000. Because lower credit limits can lower your credit score, and because, according to this and other articles, “it never hurts to ask”, I called to respectfully request that it be raised back to the original amount, The B of A representative’s response was not only to deny my request but to lower it further to $2400! Right there on the spot! When I complained that I had been a B of A customer since I was 8 years old, that B of a holds my home mortgage, that I had NEVER had a late payment with them or any other credit card or loan, his response was to offer to close my account for me.
My advice: Do not talk to the credit card companies, talk to a lawyer!
November 1st, 2009 at 18:40
I have been with the same cc company for years now and I have limit of 15K I went to use my card which is paid off each month and it was declined was only for 200.00. I tried calling to see what the problem was and was not able to get a response from the person that answered the phone. I use my canrd for the bonus flying miles I get with it since in my line of work I have to travel. I had purchased some investment property that went into foreclosure because the mortgage company did not want to work with me. I have not received any notice of them lowering my limit – why would they do this?
December 6th, 2009 at 12:13
We allow our Goverment to bail out these bad boy banks and then we allow the very same banks to screw us over. Why would a bank want to screw you? Because they can!
December 8th, 2009 at 10:52
B of A & Citibank are crooks! Im glad to hear (not really glad, but someqwhat relieved) that we are all in the same boat. This situation happened to us too. B of a offered a balance transfer of 0% until December 2010!!! I actually have it printed off their email to us off the b of a online banking. When we called to do the transfer (we had 10k availble to us, again ,NEVER MISSED A PAYMENT IN 25 years!!)they said, oh we never offered that to you. i told the moron to go to THEIR website and look at the email THEY SENT US. they said that must have been an error!We will have a supervisor see what they can do. Two days went bye, I called again to have the bal. transfer done, they said, oh your account has been closed! CLOSED ! for no reason.. because why? i called to take advanatage of something THEY offered? of course, then Citibank reduced my credit line from 10k to 100.00 over what i owed!! (approx 3400.00)then Chase did the same thing.I had a credit line of 6000.00 they reduced it to 2000.00 and i owe 1800.00..i almost feel like i should file Bankrupcy and tell them all to go to h—-? I almost feel like that would be better. crying all the way… i stil think i should!
December 29th, 2009 at 01:54
There SHOULD be laws against these credit card companies ruining our credit by lowering our limits to just over what we owe!!! Pretty much ALL of my credit cards have been attacked with lower limits and higher rates. I pay all my bills on time and have not been late with my credit card payments. I recently paid my AX down from a 9,000.00 balance to a 2,000 balance and they immediately lowered my limit from 10,000 to 2,500!!! NOW it looks like I’m maxed out, in spite of the fact I just slapped 7,000.00 on this account!!! This hurts my credit report, and all my credit cards are following suit with the lowering of my limits, and raising of my interest rates!!! I am systematically closing my accounts as I learn they are raising my interest rates, but I fear this may also hurt my credit report. Does anyone know of anything i can do???? I’m looking for a class action law suit right now and if i don’t find one, will be looking for an attorney to help me start one.
January 7th, 2010 at 20:40
Like another poster here, we slapped $550 on our BOA to free up credit to rent a car. The rental company put the hold on the credit card. The hold was released and in the lapse of time between the hold amount and actual rental charges, they lowered the credit limit to just over what we owed.
Be aware people if you slap a large amount on your card in order to “free-up” to get a rental or anything else, they will lower your limit almost immediately.
If you can’t pay your card off, just give them what they need until you can and when things get better, remember who screwed you.
I know this is a small amount compared to others here, but is happening all over from small lines of credit to big lines. It doesn’t matter anymore.
January 24th, 2010 at 20:32
I 2 have had all of my credit card limits lowered to just above what I owe. Other than an identity theft issue in 2006/07 when someone charged up a lot on my cc, which I paid off, I have paid all of my bills on time for the past 3 years (except for one 30 day late because my online bank sent the payment to the wrong company by mistake!). I had a $20K limit on one card, that was lowered to just above what I owed, i.e., $4500 (money I spent for my father’s funeral). I had another with a $10K limit that was lowered to $3000 (just above what I owed). I had another one that I pay in full every month that was lowered from $2000 to $1000 even though I have two mortgages with the same bank, pay all on time and have over $600K equity in my home. I have several other older credit cards that I don’t use often and haven’t in several years, but were cancelled (I got the company to change it to cancelled “by consumer” from “by grantor”! It seems that the new credit card act is simply screwing the consumer and the creditors are finding ways to still “stick it to us” without violating the Credit Card Act! Something needs to be done! Thank goodness I don’t need credit as I make a good sum of money but I don’t live my credit score sinking down simply because the credit card companies are bullies!
February 17th, 2010 at 17:20
I recieved a call this past weekend from Cap One and they lowered my limit from $8,000 to $5,300, that just a little more than my balance. My credit score is good and have had this card for several years now. This is the first time my balance has been this high. I have several other cards and I pay each one on time and have never been over any of the balances. I was shocked when they did this based on my past history. I really don’t need the $8,000 but wish they had lowered it to about $6,000.
March 7th, 2010 at 17:34
Today I accidently stumbled into finding that my credit limit was lowered by 25%It was not lowered when the most recent statement was issued, and I was not notified in anyway. There are some messages online in my online acct, but all of them say that they have received my payments. I paid them 40% of my owed balance this month, and my payment was 12 days early. I have NEVER been late on a payment. What is unbelievable was that they waited for the second I made a huge payment before lowering my limit. I called and complained, but no one is there on Sunday. I am furious, because I have automatic payments coming out and I wouldn’t have even known except by a fluke. They are not allowed to lower my limit, without informing are they?
March 19th, 2010 at 20:36
I only had a $2000 limit. I made a payment of $900 and then BofA lowered my limit to $1100, which means my card is still maxed out. I know this is money I owed them, but I was counting on that money to be available. I’m pregnant and moving and now I feel like someone robbed me of $900. It is so disappointing that they did this because as soon as I pay it off they are definitely losing my business. I’m going to close my checking account as well. Oh well, their loss.