Credit Card Horror Stories: Tales of Credit Limit Reductions and Account Closures

90 percent reduction
I received a Macy’s Visa back in 2005 that I didn’t even recall applying for. The credit limit was $5,000. Nevertheless, I didn’t use it until this year. I had planned a trip to Disney in Florida and wanted to use it then. I called to activate it and found out that my limit was reduced to $500. How drastic was that?!
— Patricia S.

Bruised credit scores
I am 49 years old and have been employed since 1993, when I graduated from law school. My wife and I have lived in the same home since 2000. Neither my wife nor I have any late payments on any obligation we have had over the last 10 years or more. We do, however, have a good deal of credit card debt, very nearly all of it at 4.99 percent interest or less. Our annual household income is over $90,000 and our total monthly debt payments, including my student loans, our credit cards and our mortgage, is about $2,400. My wife’s credit score was about 720 and mine about 690.

A few months ago, Bank of America advised rather abruptly that it was cutting our cards’ credit lines by a total of about $30,000. This increased our credit utilization ratio rather dramatically, and it has begun affecting our credit scores. My wife’s score has dropped by more than 50 points and mine by an even greater amount. In turn, I believe other credit issuers will begin cutting our credit limits. We just received notice from American Express, for example, that my wife’s card limit through them will be cut by over $5,000. No doubt actions such as this will further depress our credit scores.

As a consequence of their actions, my wife and I are seriously considering severing our relationships with Bank of America and American Express. Although this sounds like the proverbial cutting off of one’s nose to spite one’s face, I don’t know what else to do to express my displeasure with these companies other than discontinuing their opportunities to profit from my patronage.
— Doug H.

Bankrate.com did a story on Friday (sorry for not getting to this earlier) highlighting some of the same stuff that I’ve been pointing out here for weeks. More and more customers are experiencing credit-limit reductions and account closures. Over the course of the past few weeks, Bankrate.com readers have been chiming in with their own credit-card tales. Many of their stories will seem familiar.

See also  BANK OF AMERICA, NATIONAL ASSOCIATION - CFPB Complaint ID 2845415

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Read the rest here: Credit Card Horror Stories: Tales of Credit Limit Reductions and Account Closures

Steve Rhode

13 thoughts on “Credit Card Horror Stories: Tales of Credit Limit Reductions and Account Closures”

  1. CITI card has sent a letter stating that they are closing a card with a $15,000 credit limit because we don’t charge on it. We stopped using it to keep our debt under control and now we;re being penalized which will impact our FICO.

    Reply
    • Lynn,

      Yes it does impact your FICO score. But at the end of the day it is their card and they can take it and go home with it.

      This is why I recommend using the cards at least a couple of times a month and paying the bill off when it arrives.

      Steve

      Reply
  2. Lisa. I know for a fact that if your husband has never used the new card his ex has. He can not be held responsible for any of it. if they can show he used it even one time. he is stuck. If they have no signature of his. He can have his name removed. This same thing happened to my sister. She made them remove her name since she had never used the card

    Reply

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