How to blow your credit limit - without spending. This will scare the shit outta you

[tangent90]

I hope I'm not duplicating, I looked and didn't find this discussed...if it was I apologize

http://finance.yahoo.com/banking-budgeting/article/106716/How-to-Blow-Your-Credit-Limit-Without-Spending

[BlooInBloo]

1. It's already in GD - it's worth repeating though...

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5260950

[tangent90]

3. Oh I didn't see it there. THank you!

...

[blue cat]

2. Thank you so much!

I just figured out that it happened to me. I paid the minimum due amt, and noticed that they had decreased my limit under what I owed but didn't think about it. I just signed back in after reading above and it said still past due. I called and the automated system said that I was $142 past due, what I was over the new limit. You saved me from further fines. I think that I may borrow against myself and pay off what I owe on credit.

[tangent90]

4. The scary thing is they can just do it without any notice, at any time!

It damn sure OUGHT to be illegal!! :grr:

[Warpy]

5. Putting the limit below the balance on personal cards is a good thing

because it forces people do do what they should be doing: using cash for small purchases while they pay down the balance on the card.

However, they need to make an adjustment for business cards that might be paid quarterly when the taxes are totted up and sent in.

I thought this article would be about how everybody from motels to car rental companies freeze a block of credit, usually far more than you'll owe for their services, until the final cost is added up. You can be over the limit renting a car and checking into a hotel on a vacation and have absolutely no idea what did it, even when your card has a zero balance.

[tangent90]

7. That's a laudable goal but the problem is, lowering the limits below the current balance

automatically triggers penalties that exacerbate what suddenly becomes an account in "arrears" when it should not be.

[Warpy]

8. True, triggering junk fees by not notifying the customer

should be illegal. It's a dirty practice and needs to be stopped.

[tangent90]

9. I believe legislation has passed to do that but doesn't take effect until next year.

Nice timing, congress.

:shrug:

[mwooldri]

10. Where I work, if the line of credit is dropped below the balance...

... over the limit fees are not (supposed to be) assessed, because it was "us" who brought the line of credit below the balance.

If they are being assessed then it needs to be revised. I've also seen plenty of cases where the over the limit fee suppression routines could not be put into play and the fees were charged - but when the customer pointed this out, the fix was to... raise the line of credit back up just over the current balance. Of course, all over the limit fees were credited. Another nasty thing about over the limit fees is that with some credit card companies, and I'll include the one I work for, if you have too many over the limit fees (3 with my outfit) then you're considered "in default" of your credit card agreement and they have the full right to raise your interest rate to the default rate. This is another thing to "fix" for the hapless agent who has to put it right when it does happen.

I hate it when the lines of credit are lowered, especially when it's below the current balance. It does appear to truly wreck an individuals' credit score because 35% of your score is based on utilization of the credit... if you have less credit to utilize your score goes down.

Mark.

[Warpy]

11. Is there a more thankless job than working for a credit card company?

Oh, wait. I was a nurse...

I'm glad your company is fixing these things when they come up. I know other companies are not as motivated to do the right thing.

[CoffeeCat]

6. The credi-card companies actions signal WORSE economic times...

There was an earlier article that came out two weeks ago, about credit-card companies canceling
cards on people--just because of the zip code in which they live.

Credit-card companies are lowering limits, canceling cards and they're playing dirty games. They're
lowering the amount of time people have to pay their bills, in order to drum up late fees.

The credit-card companies realize that the party is over. They made billions off of us--as we paid
for things with those cards plus interest. Now, the jig is up.

If you really pay attention to the collective actions of these companies, it's evident that they
see horrendous economic times ahead. So, what they're doing is: 1.) Anticipating that people won't
be able to pay off balances AT ALL; 2.) Trying to anger people into getting rid of their cards, so
there will be fewer cards out there when financial hell hits.

What happens if it's really apparent to most people (it's not now) that we truly are in Depression-like
circumstances and that it's every man for himself? People will use their credit cards--to panic stockpile.
If people have credit--they'll stockpile for an indefinite emergency and they won't care if they'll be
able to pay it back. It will be about survival.

No credit-card company wants to be holding the bag--so to speak.

These articles aren't simply about the credit-card companies being assholes or trying to take more
of our money. These articles are a clear signal that these companies know how terrible the economy
is going to be--and they don't want their cards in the hands of people when this happens.

[Turbineguy]

12. There is this:

One of the reasons we are in this mess is because of the way banks behaved. And they always behave the same. When they make a decision, it's to lend money to Mexico. Their credit granting system is based on a set of formulas the only benefit of which is to keep people from having to make a decision.

Are they cutting back on the credit lines of perfectly credit worthy people? Yes they are. It's because their decision avoidance system tells them to.

Their already bad system was modified to pass all risk to "someone else" which meant they could lend to any and all comers. And I'm not talking about poor people, I'm talking about middle and upper income people who could and did get "liar loans". It doesn't matter as long as they don't have to exercise judgment and make a decison.

There's a skill about making decisions. You're going to get some wrong. That's the risk. But making no decisions, means you will lose your skill and get all of them wrong.

They need to become skilled at making decisions, not at becoming skilled at devising methods for decision avoidance.

I've run around with these people and I always tell them: "If you don't think I'll pay back the money, my advice is not to lend it to me!"

[MISSDem]

13. That is what they are doing I would think. Not loaning to people

who the think won't be able to pay them back. That's why they are cutting the credit limits, etc.

[Name removed]

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