Is this possible??? (credit card issues)

[vivilasvegas]

My co-worker's credit limit which was $24,000 was lowered to $1,400 because of payment not being made for 3 months on a credit card she and her daugher shared. (daughter was making payments...or not!)

Can a different credit card company lower your credit that much because of another card??? (I told her I'd ask here) She said she had perfect credit before this, and has had this card for at least 20 years.

I feel bad for her kid!

 

[RUDisney]

Credit card companies will often do credit checks on you after you've had the card. Even if you are in good standing with them, once you are delinquent on another payment, they can raise your rate or decrease your limit. The theory is that you have an unsecured line of credit that is a bigger risk for them if you are not paying other debtors. It doesn't matter to them that you are "just" a cosigner on another account. They view it as your responsibility to make sure all of your debts are paid, cosigned or not.

Has your friend talked to the company for a second chance arrangement?

 

[ducklite]

Sure can! They can even cancel your card if your credit situation changes. Most creditors run credit checks on you every now and then to make sure you aren't in trouble and cut their losses if they have to.

Anne

 

[bellacam]

Absolultley. A credit card company you do business with can look at your credit report and determine your risk based on how you are using other cards. The only thing they have to do is let you know which report they used to make their decision. I worked for 5 years for a major cc company and we did this daily.

 

[BriarfoxinWA]

My guess is the 90 day late payment is showing on your co-worker's credit report. The credit card companies pull your credit report regularly and that would definately be a red flag for them. They are well within their rights to lower the limit and even cancel the card if her credit score has suddenly gotten very low. Having a 90 day late payment on your credit report is REALLY serious.

 

[thinkerbell]

I'm pretty sure they can do this. I know I have heard that they can change your interest rate if you are late on ANY of your credit cards.
Boy, I would hate to be the daughter. This is one of the reasons that as soon as my kids turned 18, my name came off of all CC's, bank accounts, cell phone bills, etc.

 

[Toby'sFriend]

Credit card companies pretty much have the right to change the terms of the card whenever they want and for whatever reason they want.

Pretty much the only boundries plased upon them are laws against usury (too high) interest rates and market forces (ie a competitor will offer a better card).

I recently heard of somebody who got her credit card interest rate upped to over 22% because she paid her car insurance bill late.

 

[vivilasvegas]

She said she's cancelling the card. She only found out about the late payments on the other card because she pulled her credit report.

I just thought that was a pretty dramatic cut. Can that ever be fixed if they start to make the payments on time?


I'm telling my dad...he thought I was bad!!

 

[BriarfoxinWA]

It's going to take time to repair the damage to her credit score. Having a 90 day late payment really brings down your score dramatically. It will improve over time but it could remain on her credit report for years.

 

[Tigger_Magic]

TF said it best -- there are few limits on what a cc company can do. People who have low interest rates have to watch all their credit closely, because miss a payment on one card and it could skyrocket your rate on all the others. Companies are looking for ways to increase profits and reduce their risk of bad debt. So expect to hear lots of horror stories in the coming year because the crackdown has begun.

 

[RUDisney]

What your friend CAN do is add a comment to her credit report that she was the cosigner on the account that was delinquent and was never notified of late payments, only the primary account holder was and she didn't communicate a problem with the payments.

It may do nothing, but it may give her a piece of mind.

It will not change her now lower credit score.

 

[vivilasvegas]

Okay, I just talked to her. She said her daughter told her that she "re-aged" the account. Something about how they will wipe the late payments off her credit report.

Her daughter offered to pay her the difference in the limit!!

And on a previous topic, my dad got his cc bill in the mail today, but he didn't notice anyone increase in his minimum payment.

 

[Nancy]

Just an example here...this happened to me a few years ago. I had a card with a pretty good limit (5,000.00) I had charged a vacation on it and was making payments for a few months. I then paid the whole thing off in full. At Christmas I charged a $25.00 present on it and my full payment for that got there 2 days late. My credit limit was lowered to $103.00. YEP 103! Not 100.00, not 150.00 but 103! Their reasoning was that they did their 6 month check and saw my credit score had lowered a bit,( a teeny, tiny bit) so they reduced my charging privileges. At that point I closed the account and will not deal with them again.

 

[luvthatduke]

Just adding that CC companies also look at your utility bill record.
If you're late once, all of your cards could go up to 22% or higher,
and this means that because you won't know you have a higher rate
until you receive your next statement, if you are close to the max
on a card or cards you will now be charged over limit fees.
It happens everyday.

 

[Planogirl]

Some credit cards are much worse than others about this. I can think of one in particular that will slam you unbelievably hard if you're ever just a teeny bit late. I have a feeling that the situations that are being described may pertain to this company in fact.

But all credit companies make adjustments and react to delinquencies. If I had a card with someone else, I would make it a rule to check each month by phone or online to see that payments are made. In that case, a quick payment can be made if the other party doesn't make theirs.

 

[Marseeya]

So what happens if they lower the credit limit, but you have a balance higher than that? Do you start getting slammed with all kinds of over-the-limit charges?

 

[luvthatduke]

So what happens if they lower the credit limit, but you have a balance higher than that? Do you start getting slammed with all kinds of over-the-limit charges?

Yep, they do it on purpose - I know from personal experience,
and after talking w/many people over the past year or so
I'm in a lot of company.

They will simply tell you to look at your terms & conditions,
and will point out they can lower your limit or freeze you
at anytime, for any reason they deem re:your credit risk.
When they increase your interest rate, you will not know it
until you get your next statement, however they increase your rate
immediately after your last statement date, as that is your cycle date.
So, you now have a minimum of 29 days of higher interest
and you don't know it. On top of that, if they decrease your limit
you will not know that until your next statement, as their letters
which are supposed to update you tend to take a long time in arriving.
So, if you are close to your max at all and this happens to you,
you will now owe overlimit fees on top of the higher minimum payment
(if that's what you're paying).