Seems like every day, a new thread is being posted in FWF about an issuer closing cards due to inactivity, reducing credit limits, etc. With the current economic crisis showing little sign of letting up, we can only expect to see MORE of this behavior from credit issuers.
There are currently scattered data points buried in this forum, so one of the purposes of this thread is to consolidate all the various topics in this master thread. Individual threads on each particular issuer are linked in the Quicksummary. Please continue discussions of these issuers in their respective thread
As savvy consumers, we obviously want to avoid this happening to our accounts. Sometimes, we cant prevent it proactively, but we can restore the lines once cut or closed. So this thread is also for sharing tips/successful stratgies you have used for reinstating all or a part of the former credit lines. Sometimes, all it takes is a phone call - so go try it and report back! Please briefly document successes in the Quicksummary noting which issuer and what method you used to restore your lines.
Lastly, it is important to understand that these decisions are being implemented en masse, and are not a personal attack against you. In many of the account closure threads, I frequently see people becoming angry that an issuer closed their lines. IT'S NOT PERSONAL. Many of these issuers cannot resell the debt on the secondary market and have to make drastic sweeping cuts and limit risk. They arent pinpointing you, its happening to virtually everyone. I understand many get angry as they are the customers who have paid ON TIME for years and have a perfect credit score. Because these cuts are happening en masse and not to specific individuals, I do not consider this new wave of mass closures and cuts to be the "traditional adverse action due to usage patterns" we have discussed for years in this thread.
When I see comments such as "I will no longer do business with that bank" I become concerned. While that is certainly your decision, note that this practice will be happening with greater frequency in 2009, and if you truly refuse to do business with any bank that chops lines, you will limit yourself greatly in your banking choices.
That being said, there ARE some institutions much less likely to employ this practice. So far, we have not seen any reports that Credit Unions are cutting lines. It makes sense, since they dont rely on the secondary market (many handle their own cc issuance, and keep all debts in-house). As such, they have much a smaller number of cardholders, in the thousands rather than the millions. Also, most credit union cards are SECURED against any deposits you have in your CU deposit account. It is certainly possible they too will start cutting limits and closing cards. However, I have also included a section in the Quicksummary to list CREDIT UNIONS that offer particularly good rewards credit cards.
Hopefully, by sharing relevant data points in an organized manner, we can better cope with these cuts and closures, restore lines whenever possible, and obtain lines less likely to face such cuts.
Chase reduced one card from 8k to $500 and another from $6k to 2600 due to my AOR. i contacted executive customer service and they are looking into it to see if they can restore my lines.
CapOne suddenly closed one of my oldest accounts due to inactivity of 12 months. I stopped using it because the limit was only $800 and I had no CashBack. I called customer service and was told that I could not reopen it.
jules128
Happy Member
posted: Jan. 6, 2009 @ 9:35p
Bank of Americaa closed my Univ of Iowa card that I opened for the 25,000 points for inactivity for 12 months. I tried to get it reopened because I hadn't used the points because I was waiting to use them for a flight. I called several times and they kept saying they were reviewing it until finally I said I just wanted to use my points. They reopened the card for just that day so I could redeem the points which satisfied me. I'm not sure if I could have reallocated on the same day it was open cause it didn't occur to me until later on.
jules128 said: Bank of Americaa closed my Univ of Iowa card that I opened for the 25,000 points for inactivity for 12 months. I tried to get it reopened because I hadn't used the points because I was waiting to use them for a flight. I called several times and they kept saying they were reviewing it until finally I said I just wanted to use my points. They reopened the card for just that day so I could redeem the points which satisfied me. I'm not sure if I could have reallocated on the same day it was open cause it didn't occur to me until later on.
Suggests that BOA wanted to work with you and be nice, but were focused on reducing the # of cc accounts.
theboogeyman said: CapOne suddenly closed one of my oldest accounts due to inactivity of 12 months. I stopped using it because the limit was only $800 and I had no CashBack. I called customer service and was told that I could not reopen it.
Although my C/L was much higher, they closed mine for same reason, inactivity.
Didn't bother to call them.
Nummerkins
Senior Member
posted: Jan. 6, 2009 @ 11:12p
Chase Cash Plus Rewards - Limit cut from $15,000 to $600 due to high balances on 2 other cards. Paid one off, called Chase Lending Operations and had credit ninja manually review my updated report (soft pull). Limit re-instated.
Issuer: BofA Reason: Inactivity over 24 months CL: $500 Resolution: Called and had it reopened.
Issuer: Wamu Reason: Inactivity over 12 months (no activity from opening) CL: $5K Resolution: Let it go, didn't care.
PlayItSafe
Dismembered Member
posted: Jan. 7, 2009 @ 8:19a
WaMu- 20K and 10K for me, plus 10K for wife, all closed due to inactivity and would not reopen. Citi Professional-12k reduced to 2K due to limited use. Just got letter, have not called.
For me a total of 40K in reduced CL's so far, fortuanately it's less than 10% of total CL's from past AOR's.
I'll call Citi and follow up on Professional card and post results.
Just spoke to a Citi rep and she said because the card had not been used in the past 6 months the CL was reduced and she was not able to reinstate. She suggested monthly usage of the card for 6 months and to call back then for a CLI. She didn't say if a credit pull (soft or hard) would be required.
Issuer: Chase Reason: Inactivity for 12 months CL:6600 Resolution: Called twice to two different CS. Both said, Chase does not reinstate closed account, hence no go!
More info: There was no number to call on the letter that I received, some people received. Give them a call if you have a number, it seems that they will reopen with a softpull.
Card: HSBC Direct Reward with 5% EDP card Reason: Inactivity for 5 months Limit: $5,000
TheManWhoExcaped
Member
posted: Jan. 8, 2009 @ 6:18a
I am curious if anyone ever had credit limits that were originally backed by doc reduced? I have several cards (BOA,AMEX,CHASE)that have high limits (all over 60K) but had to provide docs to obtain to start with. They have been idle for over 6 months now. I wonder if these limits are now in danger as well? Please post your experiences.
I had a Citizen's Bank card closed the other day for 12 months of inactivity.
smurth
Happy Member
posted: Jan. 8, 2009 @ 3:39p
theboogeyman said: CapOne suddenly closed one of my oldest accounts due to inactivity of 12 months. I stopped using it because the limit was only $800 and I had no CashBack. I called customer service and was told that I could not reopen it.
I too had the same experience with Capital One. My CL was $1500. First I panicked, then I tried to get it reinstated then I researched a bit and now I am glad they closed my account.
ProfessorEd
Senior Member - 1K
posted: Jan. 9, 2009 @ 12:00p
I had relatively large lines with Chase and AMEX ($50,000 plus) and had them cut drastically.
With a complaining letter and documenting I could lay hands on about ten million quickly I was able to get them restored.
The extra work was probably worthwhile to have the large lines in evidence to keep utilization down and for possible future use. Although I had done little with AMEX recently I had considered concentrating spending on their Blue cash (less work than using whichever card gave the best rebate for a particular purchase type and possibly more profitable.) Of course, doing significant spending on a Blue Cash with a $500 limit would not have been practical.
I have several times been able to keep large MBNA/BOA lines (totaling perhaps $150,000) with the work of sending documentation of liquid sets.
However, it failed to work at least once. Although I think they should have been able to take a $2,000 risk for a customer who showed his check writing capacity was over 800K (reliance on mechanical scoring system I think).
To understand a bank's situation you should realize that many people will only use starting using their currently unused lines when they lose a job and need the money (or have large medical bills, or are flooded out by a hurricane, or start a business, etc.). Such customers may eventually be unable to repay the loans.
Unfortunately, the best credit risks probably do even bother to take the time to argue when their lines are cut because they do not really need the lines, so one arguing may be evidence that one is anticipating needing money. This can make them less receptive to appeals (especially since documents may be faked etc.) The first rules of conservative banking is lend only to those who do not need the money <g>.
Chase closed all (five) our accounts after a financial review when I called to close two of my credit cards !
They closed all mine and my wife's accounts including chase Freedom Cards which we were using (10-15% utilization) without any balances. In total they closed 5 accounts among both of us. We have excellent credit history & score and have never been late on any bill and do not carry any balances with only 10 to 20% utilization of any of our credit line.
They sent an apology letter, re-opened all accounts with a promise of the credit limit increase after a complaint.
They, then, closed all of them again! Looks like a difference of opinion among left and right hands at Chase.
impoverished
Senior Member
posted: Jan. 19, 2009 @ 9:44a
manuvns said: I ma planning to set 1 automatic payment of my bills with each card to avoid closing Good idea, but seems like it would only help for maybe six or eight accounts. Not trying to TC, but is there a way to do this for 30 CC accounts? I for one don't have that many bills monthly.
I have a Home Depot Citi card with a $5001 limit(yeah I know...5001?) that I haven't used in 29 months...I think I'll use it to purchase a gc online just to show some activity, but I'm almost afraid that it'll wake the dogs and they'll slash my CL!
ShakuniMama said: Chase closed all (five) our accounts after a financial review.Sorry to hear about this, ShakuniMama.
When you get a moment, would you please detail the Chase FR (what triggered it if you know, what it consisted of, et cetera)? We're all familiar with the AMEX FR, but not so much with Chase. TIA.
batescards
Member
posted: Jan. 19, 2009 @ 3:27p
Barclay -closed visa (airtran points) due to inactivity 12months. To be fair, I only used it once, ever, just to get the bonus points. I've got AMEX, chase,BoA, and Citi Cards with average of 40K credit line on each that have so far not been affected at all. I pay in full every month with approx. 5% utilization each month.Credit rating is only average because I screwed up about 2 years ago and made a late payment on a credit card.
DaveHanson said: ShakuniMama said: Chase closed all (five) our accounts after a financial review.Sorry to hear about this, ShakuniMama.
When you get a moment, would you please detail the Chase FR (what triggered it if you know, what it consisted of, et cetera)? We're all familiar with the AMEX FR, but not so much with Chase. TIA.
I actually called Chase to close my Southwest Credit cards (Personal & Business) and the CSR did a FR there and then and said I have too much available credit across all my credit cards among BOA, Citi and AMEX cards and he is going to lower my credit limit(s) but instead proceeded to close all three of mine (Chase Freedom as well) and my wife's Freedom & Personal Southwest cards. what they were not counting on was that I closed our WaMu accounts after transferring out our $$$$'s. It was not earning much interest after takeover by Chase anyway. I think Chase is nervous about the available credit as they believe that people are going to lose their jobs and then they are going to use the available credit without having the ability to pay. I have a feeling that worse is going to come as people have started using their "inactive" credit cards to prevent closure due to "inactivity" but the nervous credit card issuers are taking it as people falling back on their credit cards to make the ends meet without the ability (jobs) to pay it back!
ShakuniMama said: I actually called Chase to close my Southwest Credit cards (Personal & Business) and the CSR did a FR there and then and said I have too much available credit across all my credit cards among BOA, Citi and AMEX cards and he is going to lower my credit limit(s) but instead proceeded to close all three of mine (Chase Freedom as well) and my wife's Freedom & Personal Southwest cards.Wow. Call to close two, and they close them all.
Did they even ask you about household income, et cetera before making that determination?
Seems more like the kind of behavior one might expect if someone's asking for a CLI. People who need to run up their credit cards don't call in to close them. But then it's a brave new credit world we're living in.
ShakuniPapa, Have you or your wife ever done an AOR ?
partygirl21
Senior Member
posted: Jan. 19, 2009 @ 4:13p
Hey all....just wanted to post that I just had a Citi Platinum card reduce my limit from $2800 to $500. Short story-did a BT to checking in April. Missed one payment by ONE day in October...Wham! 28% interest plus fees. First chance I had to pay it off was January. Paid it off...checked my account today and it was down to a $500 limit. My credit score is around 625 and I have revolving debt that's high compared to income...I'm paying it down. It doesn't bother me too much b/c I don't use the card and will probably close it. Just figured I should post this.
DaveHanson said: Wow. Call to close two, and they close them all.
Did they even ask you about household income, et cetera before making that determination?
Seems more like the kind of behavior one might expect if someone's asking for a CLI. People who need to run up their credit cards don't call in to close them. But then it's a brave new credit world we're living in.
Yes, AFTER telling me that he is actually going to lower the CL. I didn't know about it till my wife tried to use her Chase Freedom card that evening and it was declined.
No, he didn't ask for my household income or anything else...he just seemed spooked by my available credit. In fact my household income has gone up by few thousands this year.
Ironically, during this period (of closing and opening and closing again) I continue to get o% APR balance transfer checks along with accompanying letter telling me how I can use those checks for BT etc due to my great credit!
elleve
Ancient Member
posted: Jan. 19, 2009 @ 4:43p
US BANK/ELAN closed all 3 cards of mine out of the blue. They stated in a letter that I applied for too much credit recently. I contested this and said I applied for 1 card in the last 6 months which could be verified through my credit report. No go, supervisor was rude and said that they will not reopen closed accounts.
jmw11
Member
posted: Jan. 19, 2009 @ 4:59p
This is why taxpayers should not be bailing out insolvent banks (eg. BAC, Citi, Chase) that have no ability to lend due to their undercapitalization.
jmw11 said: This is why taxpayers should not be bailing out insolvent banks (eg. BAC, Citi, Chase) that have no ability to lend due to their undercapitalization. Yeah, that's the irony of the situation. Chase was given 25 Billion so that they can extend credit to consumers BUT they are doing exactly the opposite by actually cutting down on consumer credit and instead using that money to offset the "Toxic mortgage" mess instead of using the bailout money for which it was intended and there is NOBODY there to hold them accountable. Instead they will be given more and more as they are "too big to be allowed to fail". It's always the "average Joe" who suffers and we will be paying for it all over the generations. what is our fault? that we never spent more than we could afford, didn't buy a house we could not afford or paid all our bills on time ? These days it pays to be irresponsible in the Socialist USA.
Skipping 168 Messages...
whoDean
Happy Member
posted: Jun. 2, 2010 @ 8:53a
US Bank reduced the CL on both my and wife's new former Citi ADA cards to just over the balance (old 0% BT).
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