Received a letter from Chase today. My 30K wamu card was cut to 7.5K. Reason cited as I "do not seem to use/need the credit line". Last transaction on the card was 21K payment to payoff the 0% BT.
Still have a 55K chase visa + a 3K Amazon card with no activities close to 10 months. Looks like I need to start putting some purchase on those cards.
I'm in the midst of a 2009-sized AOR for my DW (aka Mrs J).
She has one US Bank Linux card approved from last year's AOR with a $25000 credit line.
One of her applications for 2.0 was for a US Bank Professional Bull Rider's Association card.
US Bank said: "We were unable to approve your application based on the information you provided."
Bottom line:Rather than shifting credit to approve the new application, they chopped her $25000 Linux to $5000 WITHOUT approval her new application (back door adverse action).
Details: Rather than calling for the reason for denial and/or to request reallocation, I sent a secure message while logged in under her existing $25000 Linux card requesting approval by means of reallocation.
Mrs J said: I was denied for a recent Professional Bull Riders Association Visa card. Please shift the credit line of this Linux card so that you might approve my recent application. Specifically, move 24000 of my current 25000 Linux credit line in order to approve the Professional Bull Riders Association Visa card (leaving just 1000 credit line on the Linux). My SSN is xxx-xx-xxxx and my DOB is xx/xx/xxxx. Their response to her request was a bit frustrating.
US Bank said: Dear Mrs J:
The lowest credit limit that a Platinium Linux Fund credit card can have is $5,000. Therefore, we have processed your request to decrease the credit limit on your account to $5,000 instead of $1,000. This change is effective immediately. To prevent future automatic increases we have placed a hold on your credit limit.
You will need to contact our Application Status Department in regards to if they are able to review your application a second time, since it was declined.
You are a valued cardmember and we appreciate the opportunity to be of assistance.
I believe as per your post above that you placed Mrs J, on the chopping block by asking to re-allocate from card A (sure bird) to possible card B (never was a bird to begin with)
These darn Ninja's are getting a bit smarter on the issue at hand.
Had $25k credit line, cut down to $12.5k during credit crisis Applied for credit line increase online and consequently they cut it down to $1k for reason of "already had sufficient credit for my income"
Based on some of the posts above (and some of my personal experience), I think gone are the days of "hitting the love button".
Consider two scenarios.
First, if you have a large and un-utilized credit line, say $50K, then it is tricky to apply for more credit (via CLI request or a new card request). I can see the computer (or the underwriter) easily conclude, "what do you need more credit for, as you are not even using your current line". On top of it, you might get your lines slashed by 50%, or by 95% just to redice exposure.
Second, if you have a large AND utilized credit line, say $50K line with $35K balance on it, then asking for a line increase is asking for trouble from a different viewpoint. Why? Because the underwriter might conclude that you have "too much credit and / or debt for your level of income", and cut your line down to $35.5.
Changing direction a bit, I would say that you can successfully get more credit for a mature account if both of these conditions are satisfied:
a. you are charging a lot of expenses, and paying full or at least a large percentage every month, month after month, b. you are making or able to claim you are making sufficient income. The criterion for sufficient has gone up a lot. E.g., before I could have a total BofA personal lines equal to 60% or 70% of my annual pre-tax income. Now, I think even 35% might be considered too high.
IMO, certain banks have started heavily utilizing internal and shared profitability statistics and scores.
Obviously, for its own accounts, a bank can derive profitability very easily. After AOR number 3, or rewards card rinse-repeate number 10, the bank can very well assess the profitability of the customer. But how about estimating a "virgin" customer's profitability?
Well, there are two possibilities: (a) banks share profitability information, and (b) banks try to derive profitability information.
Obviously, if (a) holds, even for some banks, then we are done. But even if (b) holds for some banks, a bank can still infer some information.
For example, Experian credit reports contain month-by-month credit limit and utilization details. Either a revolving balance, or a charge-and-PIF type of balance would show up pretty neatly on such history.
A bank does not care which variety it is, because both are likely to be profitable. E.g., someone charging $2500 a month on a rewards card is a pretty decent customer to a bank, with about $300-$600 in merchant fees. Solicitations, offers, etc, may possibly sweeten this deal for the bank in the long run, and there is always the possibility that the customer might start carrying a balance and pay a decent interest.
A balance-carrying and interest-paying account would also be detectable.
And lastly, IMO, you can detect a rate arbitrageur as well. Basically, the history of the balance would look like this:
1. Open, zero balance, 2 - 11. x% utilization, with a small decrease every month, where x > 35% and < 90% or something like that, 12 or 13 month -> paid in full, 14 + months - zero or negligible balance.
If you have a few cards like this on your credit history, then you are done - assuming banks do this.
And lastly, let's just assume the banks are not as smart, and don't utilize all that info. In the old days, a new (virgin for that bank) customer with large unsecured lines elsewhere would probably be rewarded with a decent credit line. This was a business policy that was rooted in optimism (you never know - customer might fall in love with our product), and easy credit.
In these days, I would say the attitude is more skeptical. Banks asks the question: exactly why do you need the credit card? Are you the one who wants to keep up with the Joneses and ends up charging $5K a month on meaningless purchases, or will you take the bank for a ride?
As a cautious choice, the bank gives you a small credit line to start with, e.g., $3K. With $3K, you can not play the credit arbitrage game.
So with this wall of text above, I would like to ask the readers a simple question:
- what type of credit profile is being rewarded most these days by credit card issuers, where "most reward" is referred to the credit lines (either new, or expanded).
I have my own hypotheses, but would love to hear some opinions before I post.
TIA.
ThirdJoker
Member
posted: Sep. 3, 2009 @ 4:43p
SuperMxyz said: Issuer: Bank of America BOA
Had $25k credit line, cut down to $12.5k during credit crisis Applied for credit line increase online and consequently they cut it down to $1k for reason of "already had sufficient credit for my income"
This happened to a co-worker of mine a few months back. Similar amounts, I think her initial credit line was in the $30k range and they chopped it all the way to $1k for the same reason. It was all started because she called to ask for a rate cut on her account.
jackcrawfish said: Bottom line:Rather than shifting credit to approve the new application, they chopped her $25000 Linux to $5000 WITHOUT approval her new application (back door adverse action)Others have previously and recently noted that US Bank is very crafty; rather than appearing as if on life-support and cutting lines willy-nilly like AMEX did last fall, they do it much more steathily. This does not make the nightly news like AMEX did.
general observation regarding credit related adverse action ... (I'm just venting)
I now find the current environment laughable (from a consumer point of view).
I am now very bitter regarding the title of this thread. The title of this thread includes "...tips to avoid [cancelled credit lines, closed cards and reduced credit limits]"
HA!
At the end of the day, in the year 2009, it seems that there are no tips which work anymore; there are no magic methods; there are no best practices by which we can follow to safely avoid getting cut at our knees.
devildoc used to have $1000K bt $$$ today has $170K (source)
I have been amazed banks do not do more profitability analysis, given how cheap computers are.
Year ago, I understood this was standard for corporate customers. they looked at total earnings and expenses of serving the customer and took action if the account was unprofitable. I understand for instance, one who had lots of checks paid out quickly (from an account where they put money in just before sending the payment checks out for instance) would be asked to maintain a larger balance.
It would be real easy to add up revenue from a customer (interest, merchant fees, money earned on investing his deposits etc.) and spot at least some unprofitable ones. From reading comments here it seems there are people who have routinely opened Chase banking accounts for bonuses, opened certain credit cards for bonuses repeatedly, repeatedly taken large interest free loans etc.
Years ago First USA (gone, merged) treated balance transfers as purchases and gave reward points on the total. For years I had tens of thousand outstanding in interest free money and such a large supply of gift cards that I wasn't sure how to use them. My AOL card was more conservatively managed, but even now I have free AOL (for what that is worth) from the credit balances I built up from balance transfers on that card at 0%.
I understand something called bumpage is possible, but one would have thought the credit bureaus would have stopped that (and banks taken their credit bureau business to firms skilled enough to have stopped bumpage).
I realize they may not be smart enough to think of everything, or have the best computer staffs. However, some of us expert in computers have heard of a service called Google where you could search with a firms name and find locations where loopholes in their systems were discussed.<g> I will not reveal the name of such sites in the chance a bank official reads this <g>.
Does anyone who works for a bank have any explanation for this (I know part of the explanation is probably compensation systems where you maximized your bonus and job performance ratings if you figure out how to attract new deposits, new loans, new balance transfers, etc? Some may remember a firm named Enron where large bonuses could be earned by doing deals (with bonuses based on the value of the deals, not their long term profitability).
Does anyone know of any large banks that appear to have recently started such a system (or as tolamapS pointed out) even written a software program to detect such customers from their credit reports?
So far I've avoided any credit decreases or closed accounts on me, although I have a lot (some would call an enormous) amount of unused credit. In fact I have received some pre-approved offers in the mail, although their numbers are less than they were back in "the good old days." The latest I received was a US Bank rewards card on yesterday, which boasted no annual fee as long as I make one purchase a year (if one can't even do that, they shouldn't be applying for cards). I still do receive a good share of those checks to use on my current cards telling me to not miss out on a low rate.
I was thinking of applying for two cards next year, but have trimmed that down to one. I feel it's best to just lay low at least until 2011. My suggestion is to rotate through all your unused bankcards once every four months, and then pay them in full. Keep any balances extremely low or at zero. Don't start thinking about an AOR now. As long as you don't do anything that will make you stand out from the crowd, I think you'll be OK.
jennatx
Senior Member
posted: Nov. 11, 2009 @ 2:00p
Bank Atlantic Biz cards closed at exactly 6 months inactivity. $50K + $25K credit lines . Maybe could reallocate lines with a new application, which would be needed to utilize these lines anyway.
jennatx said: Bank Atlantic Biz cards closed at exactly 6 months inactivity. $50K + $25K credit lines . Maybe could reallocate lines with a new application, which would be needed to utilize these lines anyway.I presume the cards were for unique SSN's?
They trimmed the BT offer from 13 down to just 6 months now (on the biz side).
recent datapoint: MrsJ was successful with her recent close/re-apply/reallocate strategy on September 30th.
jennatx said: Bank Atlantic Biz cards closed at exactly 6 months inactivity. $50K + $25K credit lines . Maybe could reallocate lines with a new application, which would be needed to utilize these lines anyway.As of last year, you could reallocate a closed biz limit to any existing Barclays/Juniper personal card.
In May 2009 jackcrawfish said: generics said: Wellsfargo reduced my credit limit by over 95%, this is a card used and paid in full every month, RIP Wellsfargo card.Curious to know more details.
Member since? Credit Line (former)? Reported Income on App? External credit factors (i.e., higher utilization on a Citi or BofA card)?
I have a 9 month BT was just paid off with a $24,500 line. (via Wells Fargo card consolidation)Wells Fargo reduced my credit line from 24500 down to 3000. They claim it was part of their quarterly review of credit profiles. I think it was caused by my applying for more credit with them.
07/30/2007 Applied and approved for AOR1.0 Wells card (16500 limit)
08/25/2008 Denied AOR2.0 card (I was testing rep "only one card" claim)
08/26/2008 Called to close AOR1.0 card and request AOR2.0 be re-reviewed.
08/27/2008 Approved for AOR2.0 card (8000 limit)
09/01/2008 misc BT for 7000 on AOR2.0 card
09/19/2008 Called to have AOR1.0 card reopened. I was told sup would have to call back.
09/19/2008 (later) executive office called me back stating my AOR1.0 card was re-opened
09/22/2008 Called to consolidate AOR1.0 card into AOR2.0 card. I was able to BT str8 to checking for no fee
09/18/2009 Soft review shows on Experian credit report
11/06/2009 I applied and was denied for a card with them. They pulled Experian. (Time since most recent account opening is too short; length of time accounts established; amount of payments on your open bankcards is too high)
11/11/2009 Line was reduced. Experian was the cited source. (amount of payments on your open bankcards is too high; high balance(s) on bankcard accounts).
Representative advised that I can call back AFTER I correct the concerns Wells Fargo has to request reinstatement of the former credit limit (24500). She said it would be a hard inquiry and that there was no guarantee of the same limit.
(sigh)
So my tip to avoid reduced credit with Wells Fargo is: DO NOT APPLY FOR A NEW CARD WITH THEM - THEY WILL TAKE ACTION ON YOUR EXISTING LINE.
peteypablo
Senior Member - 1K
posted: Nov. 16, 2009 @ 12:11p
Yeah, they just cut DW's line down to $2K from $20K even though she had paid it off. It made it easier to decide to close in anticipation of an AOR in a month or so. They cited her deposit account balance - always quite low - as well as the usual suspects.
doniam
Member
posted: Nov. 16, 2009 @ 4:53p
Chase just cxd my card. My fault it was an old WashMutual that I had not used in quite a while.
Had $25k credit line, cut down to $12.5k during credit crisis Applied for credit line increase online and consequently they cut it down to $1k for reason of "already had sufficient credit for my income"
CHASE datapoint...I was approved for a CHASE OptionsXPress card in late November and as part of my 5 calls to consolidate existing limits to the new card, they closed everything.
CARD Opened? Closed?
CHASE HOME 2007 Yes
CHASE Sony 2007 Yes
CHASE (WAMU) 2007 Yes
CHASE Rewards (WAMU) 2008 Yes
CHASE Perfect 2008 Yes
CHASE BIZ 2008 Yes
jackcrawfish said: CHASE datapoint...I was approved for a CHASE OptionsXPress card in late November and as part of my 5 calls to consolidate existing limits to the new card, they closed everything.
CARD Opened? Closed?
CHASE HOME 2007 Yes
CHASE Sony 2007 Yes
CHASE (WAMU) 2007 Yes
CHASE Rewards (WAMU) 2008 Yes
CHASE Perfect 2008 Yes
CHASE BIZ 2008 Yes
They are ruthless. Similar experience here. And the worst part was, the rep was pretending to sound nice as he was telling me what he was doing.
pekkle
Member
posted: Dec. 9, 2009 @ 12:47p
My Citi Rewards card (don't have it on me so don't remember the specifics) had its credit line reduced to $100 after 12 mths of inactivity.
okwiater said: jackcrawfish said: CHASE datapoint...I was approved for a CHASE OptionsXPress card in late November and as part of my 5 calls to consolidate existing limits to the new card, they closed everything.
CARD Opened? Closed?
CHASE HOME 2007 Yes
CHASE Sony 2007 Yes
CHASE (WAMU) 2007 Yes
CHASE Rewards (WAMU) 2008 Yes
CHASE Perfect 2008 Yes
CHASE BIZ 2008 Yes
They are ruthless. Similar experience here. And the worst part was, the rep was pretending to sound nice as he was telling me what he was doing.My doctor spoke with the same friendly tone while finishing off my vasectomy last week...
the nerve...
what happened to , "if you don't have anything nice to say, don't say it at all"
godfather123
Member
posted: Dec. 9, 2009 @ 2:11p
Don't push the BOA CLI button. They closed my account and reduced limit on another card from 10k to just above balance. They don't care if overall low utilization(10%). The reason given was I had 10k in balances on 2 other lender cards and I was using 6-7 cards though they all had <100 balance combined (except 10k balance on 2 other cards)...
cardinalandgoldfan
Ancient Member
posted: Dec. 9, 2009 @ 5:09p
Hmm, I had the opposite experience. My $20k BoA card got knocked down to $10k in August. It didn't really hurt me since I hadn't used the card in a year, but it was still annoying. I sent in the online CLI form to have the $20k limit reinstated 5 days ago and they restored my card to the full $20k. I wonder if they're going back to being a little more liberal with people who have good credit.
Seems the cc issuers are getting a "little" more comfortable, but I still wouldnt mess around with anything BofA at the moment if you already have high limits and want to keep them
craig10x
Senior Member - 5K
posted: Dec. 13, 2009 @ 10:41p
cardinalandgoldfan said: Hmm, I had the opposite experience. My $20k BoA card got knocked down to $10k in August. It didn't really hurt me since I hadn't used the card in a year, but it was still annoying. I sent in the online CLI form to have the $20k limit reinstated 5 days ago and they restored my card to the full $20k. I wonder if they're going back to being a little more liberal with people who have good credit.
I was just curious....When you use the online Credit Line Increase form...do you also need to call up and speak to the credit department...or will they make a decision without any contact from you directly?
cardinalandgoldfan
Ancient Member
posted: Dec. 14, 2009 @ 6:20p
ColbyS: I'm amused that you automatically assumed that I was insulting Crawfish's credit and chose to be the only one to red my comment. I wasn't making any comment on Crawfish's credit. I was merely reflecting on my own. Oh well, no worries.
SuckisStaples: I guess I was lucky that my BofA card was my lowest limit by far at $10k, so I really didn't care if they would drop it further. Had they done so, I probably would have just dropped them altogether (even if it would have slightly hurt my overall credit limit).
Craig10x: Nope, I didn't call. Just filled out a form and they increased my credit.
FYI if you have usage i've found bofa (FIA) to be quite good. They upped me from 15 to 20k on the schwab visa and before I was only able to go about 10% above the cl before they would start declining charges. I got up to about 50% over recently without even realizing it and they were still approving charges.
Decisions decisions. I want the FIA Schwab 2% card but already have a 50K BOA with a 45K 0% balance that I will be paying off next month. I expect that I will lose all of that line if I apply for a new card, but now there's speculation that the Schwab 2% may be killed. Decisions decisions.
Any new tips? With the end of CHASE and USBank no/capped fee offers a couple days ago, I struggle to find reason to keep all my cards active.
With Discover Current Teen card, I've been purchasing $1-3 each month with all of my "used" arbitrage cards (20+ cards).
I have an automatic bill payment scheduled for each of these cards for the same or similar amount (see thread on which issuers cancel bill if it is small).
After receiving adverse action (closed accounts) from BOA back in April 2009, I was approved for the 2% Schwab Signature VISA card this morning.
The credit analyst told me they also serviced Bank of America accounts and asked me "what happened all of a sudden in February with your Bank of America cards? I don't see any stress on your credit report. Why did you stop using them?"
I advised that I have been using Citi as my primary card.
He either (a) did not know they were closed adversely or (b) wanted to see how I would respond to his question purely for his own entertainment value.
"What credit line would you like?"
20,000 I responded.
"Done"
EDIT:Letter arrived via postal mail telling me that I was ultimately DECLINED after doing a second review. When I called to inquire, I had to be transferred from one ninja to a secondary analyst. The secondary analyst told me that they did not approve the Schwa card for the exact same reason as they closed my cards in April 2009. He said effectively, "you have too much available revolving credit."
Bank Atlantic reduced MrsJ credit line from 25000 down to 19000. She is riging out a BT offer until October 2010 and still has a balance of roughly 18500.
Citi closed all my accounts except for the ADA card with the 0% offer on it. It got limited from $10,000 to $500. Damn, should have used the promo offer before my year ran out.
Of course, I hadn't used one of the closed cards in like 4 years, and the others didn't have any activity either.
They just cut MrsJ's personal account from $2000 down to $500 last week citing something like "line now reflects the corresponding use of the card..."
In an attempt to keep the card active, we had been running $1.99 monthly on the card, sending a $1.00 bill payment, and receiving a $0.99 credit for the prior 3 months...
jackcrawfish said: Updated my March 18th post... Schwab declined me after initially approving....Thanks for the update. You had given me some hope of getting Billpay Choice again someday... but now dashed.
Is there some discussion somewhere on what an "appropriate" amount of revolving credit is in FIA's eyes?
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