Banks to clamp down on credit card holders

Banks to clamp down on credit card holders

www.freep.com

The credit crunch is closing in on credit cards. Banks that got burned on bad mortgages are now bracing themselves for billions more in bad debt on credit cards -- so they're trying to cut their losses by cutting off customers.
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Big-name credit card issuers, including Bank of America, Chase and American Express, are shrinking -- not raising -- some credit limits. And some, including Chase, are closing some accounts.

American Express will notify its card members in the coming weeks

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I don't think this has been posted already. Just read this in the news. I figured this was coming. It's a good thing I pay mostly cash for everything and don't have credit card debt. The ones this is going to hurt are the ones who are using their credit cards to get by. I've know a lot of folks who do this.
Banks are trying to cut their loses, however they shouldn't have been throwing credit at everyone. My 15 yr old gets preapproved credit applications in the mail! My wife got one credit card in her name and she hasn't had a job in years!

www.freep.com
(visit the link for the full news article)

[edit on 30-10-2008 by Clark W. Griswold]

About three weeks ago my card issued through LloydsTSB did have a 15k limit, it now has a 1k limit, when it was first issued it came with a 4.5k limit.

They sent me a letter saying it was to help against fraudulent transactions, if they just said we don't have enough cash to cover your limit then I would have fully understood.

On a side note, my two other cards have at the same time raised my limits, so not all bad.

Wolfie

It's about time this was done.

Millions of people owe thousands of dollars each to banks, money that they have little if any hope of repaying.

Most of them should never have been given credit in the first place.

I follow a very simple rule, if I can't pay cash, I do without. I paid cash for my car, paid cash for my house, and I have no debt at all. Yes, it took me years to save (and invest) to have enough to buy a house, but so what?

Who says we are entitled to all of that?

I don't see this happening.
They constantly send me letters offering me 50k more credit limits with 6 months no interest etc.
I think the competition between banks when it comes to credit cards will not see them cutting off anyone.
Because it makes them loads of money.
Obviously if you default on a credit card its highly unlikely you'll get one again.

Originally posted by OldMedic
It's about time this was done.

Millions of people owe thousands of dollars each to banks, money that they have little if any hope of repaying.

Most of them should never have been given credit in the first place.

I follow a very simple rule, if I can't pay cash, I do without. I paid cash for my car, paid cash for my house, and I have no debt at all. Yes, it took me years to save (and invest) to have enough to buy a house, but so what?

Who says we are entitled to all of that?

I was brought up to think and do just like you, but for me the only thing in my wallet is plastic, the cash to pay for it is in the bank, I use the plastic to pay there and then, get home then pay the card.

If the cash ain't in the bank then the plastic stays in the wallet, mind you I might be safer now putting the cash under my mattress

Wolfie

amex already started making those calls. They've also announced a 7,000 person layoff. as I posted in another thread on the credit card crisis, amex has an increasingly bad problem with outstanding balances on the platinum and black card accounts.

Not sure who's going to see the limits, if it will be green and gold only or just green etc. I'd imagine they are going to limit the folks who charge less and let the idiots who run up the monster bills continue doing so, when it is their debt that is, apparently, causing the most trouble.

truth is, the folks who sparingly use their cards are the ones who make those minimum payments and who eventually pay the cards off. they should not be penalized for a global mess.

I work in a bank in the Credit Card and new accounts division. It is a national bank. Credit limits were dashed about 3 months ago. No matter your credit score, they were cut.

Yes, banks know the next shoe to fall is with credit card defaults. People rightfully so need to pay their mortgage and feed their families.

We are no longer reducing interest rates. I used to be able to over ride the system and cut your rate, now it wont let me do that.

We used to waive a late fee if the person called. I never cared what the reason was I'd just waive it if asked. Now the system wont let me do it.

We used to charge 7.00 for a payment over the phone, now it is 10.00. I told my boss they had lost their minds. While 7.00 might not seem that bad, 10.00 is a loaf of bread, a dozen eggs, milk, etc. People wont pay it. Most don't. I always tell them you can pay for free online. A lot of people don't know that. That will be the next thing to change.

I used to really like my job, I issued credit cards, helped people when they called in etc. Now they have tied my hands and people yell at me all day. I understand why they yell but it sucks.

Home Depot just raised my credit limit by 1000.00? I also got a credit increase a month ago on my Chase cc?