Credit Card Situation

[lovemygoofy]

Okay so I received a call today from a spouse in the unit. She is just now reading her mail and received a letter from her credit card company. They are reducing her credit line. Problem is that with the reduction of credit, the balance now puts her over her limit. She will have to pay the over the limit fees in addition to the monthly balance.

She asked me if this is really can happen. I told her I had no idea and she needed to call her credit card company. I'm guessing because of the credit crunch it would be hard for her to get another card to take some of the balance to another one and I don't know that it's really the option. Does she just bite the bullet and pay all the extra fees? Heaven only knows what the interest rate is now. Suggestions?

 

[Chernabog#1fan]

I do not have any answers for you but I just do not think that can be legal (or should be legal). If they are reducing her limit, they should waive the over the limit fees as long as she makes the required minimum payments. Please let us know how this works out for her.

 

[agnes!]

Hmmmmm...this is a toughie. I think she should call up the credit card co., touch the option for canceling the card and tell that particular office she is thinking of cancelling her card and transferring the balance to another institution.

They might be willing to give her a better deal if they know that she;s willing to walk away from their company.

Would she be eligible for one of the USAA CCs? They're usually easy to work with and have pretty good interest rates. Or maybe one of the Federal Credit Unions that her family is eligible for?

agnes!

 

[disneyfreakk]

Tina,

Go to www.creditboards.com/forums and ask them! I remember seeing something about people in the military and deployed getting special consideration. But I don't remember what consideration that might be. But yes, there have been ALOT of credit line decreases this week over on the creditboards!

I would tell her to call them and explain that her husband is serving out country. Tell her to be VERY nice, and to call during regular business hours. (hopefully she will get a call rep in the states calling during reg hours) They might raise her limit back up (at least enough to cover what she already has on the card) and wave the fees since it was not her fault.

Sorry I am not more help, but at least its a starting point!

 

[agnes!]

Tina,

Go to www.creditboards.com/forums and ask them! I remember seeing something about people in the military and deployed getting special consideration. But I don't remember what consideration that might be. But yes, there have been ALOT of credit line decreases this week over on the creditboards!

I would tell her to call them and explain that her husband is serving out country. Tell her to be VERY nice, and to call during regular business hours. (hopefully she will get a call rep in the states calling during reg hours) They might raise her limit back up (at least enough to cover what she already has on the card) and wave the fees since it was not her fault.

Sorry I am not more help, but at least its a starting point!

She could always push the button for a Spanish-speaking rep. They're supposed to usually be in the US.

agnes!

 

[disneyfreakk]

Hmmmmm...this is a toughie. I think she should call up the credit card co., touch the option for canceling the card and tell that particular office she is thinking of cancelling her card and transferring the balance to another institution.

They might be willing to give her a better deal if they know that she;s willing to walk away from their company.

Would she be eligible for one of the USAA CCs? They're usually easy to work with and have pretty good interest rates. Or maybe one of the Federal Credit Unions that her family is eligible for?

agnes!

DO NOT HAVE HER DO THIS!!!! They may just close the card if she threatens to close the card! And then she would be worse off than she already is. In this credit enviorment dont threaten to close the account unless you are ready to walk the talk!

 

[DMickey28]

Based on what I have heard and a slightly similar personal experience this week, YES they can do this without notice.

We had a situation this week. DH was traveling to IL and WI this week for business. Since our debit card gets frozen on fraud alerts when we go to Miami from Boca we decided to pay a large sum down on our CC so that he had plenty of room to use that since he was entertaining various clients. He went out on Wednesday. Rented a vehicle, stayed in one hotel and bought dinner Wednesday night. Thursday he went to get gas on the way to WI and the card was declined. He called and was told they cancelled it that morning which was the day the statement turned over. No reason was given and he didn't have time to track down a supervisor for an answer. So we had to scramble to move cash around and call our bank (which we should have done in the first place) to alert them he was traveling and not to freeze the card. He IS LIVID ... he pulled his credit report this morning and there is nothing new on it ... there is no reason for this that we can see. We figure it's due to the credit crunch or something. At least we have a paid off card that we weren't expecting to do right away!!!

I am sorry for your friend.

 

[georgina]

I think I would be calling the help line at a local TV station or newspaper. This sounds like just the type of thing they like to take on; if the CC company won't waive the fees, often a reporter can get them taken care of. There is no way she should have to pay over limit fees on charges she made before they changed the limit.

 

[agnes!]

DO NOT HAVE HER DO THIS!!!! They may just close the card if she threatens to close the card! And then she would be worse off than she already is. In this credit enviorment dont threaten to close the account unless you are ready to walk the talk!

DON'T LISTEN TO ME. I think disneyfreakk has much better advice.

agnes!

 

[lovemygoofy]

I told her to call her bank and find out what was going on. Ask for the reasoning and honestly I don't know the financial situation. They may have 10 credit cards for all I know. I told her that if they were in good standing with that particularly company that I would stress that point and see if the limit can be rasied or if fees could be waived. I would think a company would want a loyal user with good standing as opposed to someone that is going to fall behind with never ending fees.

 

[pr surfer]

From what I gather creditors are reviewing their open accounts. Citi lowered my limit by 50% today.

Tell the person who's affected to contact consumerist.com since they might be able to help.

 

[Kimickey]

From experience...(not with this type of issue) However www.creditboards.com is AWESOME. I toggle between the DIS and them all of the time.

There is such a breadth of knowlege on that board that it will make your head spin.

Post divorce my credit was trash...(thanks to my ex), I found credit boards and I can tell you my credit is great all because of the experience and knowledge on that forum. I spent many of nights with zero sleep, reading the credit boards. I still frequent there today just to ensure I stay ontop of my game.

 

[figment52]

If she was not over her old limit when the limit was lowered AND she makes no additional charges until she is under the new limit she can protest, politley and in writing, the over the limit fees and they should be reversed. They key is to be calm and polite. She can still call and make the request but as a CYA, follow it up with a letter. It would help if while she was on the phone she got a name and fax number to send the letter too.

Computers are programmed to just do things if certain conditions exist. They are not programmed to hunt and see if a ceiling was dropped and that caused the over limit situation.

 

[Aimeedyan]

Eeek, this is scary.

 

[jenn&nelsonrego]

This is real scary... as we are planning to rebook our cruise onboard this year and will be paying off a credit card just before we leave in order to do so...

Then again, EVERYTHING about the financial industry is scary right now!

 

[mickeysgal]

I'd sure like to know what companies are starting to cut limits. Anyone? Discover, American Express, Chase? Or is it the local department store type cards?

Mine have been known to raise my limits, so I guess they can just as easily lower them. But that stinks to have them lowered so much that the balance now exceeds the limit. They really should allow the consumer a grace period to clear off the overage without penalty.

 

[pr surfer]

Amex and Citi are two that I know for certain are cutting limits. According to the rep I spoke with at Citi, all banks are starting to do this.

I'm curious what actions Amex might take I have no limit.

 

[bsnyder]

From what I gather creditors are reviewing their open accounts. Citi lowered my limit by 50% today.

Tell the person who's affected to contact consumerist.com since they might be able to help.

I just did a google search and don't see anything in the news about this?

 

[Rence]

Capital One recently reduced my limit. I had a balance on the card, and they dropped the limit to just a little above the balance, so I am not facing the same situation described here.

I have good credit, no dings on any cards, but I admit my balances are on the high side, I've been paying them down. Didn't bother me that they lowered the limit on that card as I have no plans to use it further anyway. I just find it funny that I still get all this mail from them telling me what a valuable customer I am etc. etc. I just think to myself that I must not be that valuable if they cut my limit.

 

[DawnCt1]

Actually, doesn't lowering the limit with an outstanding balance, lower one's credit score? I thought that one part of a credit score was percentage outstanding against available credit?