During the past week, a number of visitors have written in about yet another round of credit limit decreases and complete credit line closures. The culprit, as always, appears to be Chase. Here are a few examples posted that illustrate the continuing abuse of solid customers who are getting slapped with credit limit cuts that lead to costly late fees. The first is from Gary:
“I just returned from a 2 week vacation and during my travels CHASE reduced my credit limit $2,300.00. I charged my entire vacation on the card with the intent of paying the full amount back on my return. When I got home I found that my card was maxed out and there were still pending charges. I went straight to the bank to pay down the card by $1000.00 so that there would be no over-limit fees, only to be told that my deposit would be held for several days and then my card payment would take a minimum of 5 business days to be applied to the card. So, while the gas and motel charges continue to pile up (over my NEW card limit), I am unable to make a payment. I called CHASE to see if there was some way to work around the problem and the customer service person on the phone told me that “I was one of the lucky ones to even have a credit line available.” apparently they just flat our closed a lot of credit card accounts on people. I was also told that it was my responsibility to check my balance before EVERY transaction to see if they have lowered my available credit… Seems like a lot to ask before each and every transaction. So, I am sitting here helpless while my credit card balance goes up as additional charges clear and over limit fees compound – while my deposit and payments are held by the bank waiting to clear. Even though I had the money to pay the card down $1000.00 BEFORE I was over limit, it will be at least next week before any of my payment is applied to the balance owed. They will pocket the fees and because of the new and improved terms of service jack my rate up well above 20% (it was under 9%) for charging my account over the available credit limit.
I feel so helpless.”
There isn’t much to say here because this is really downright unfair-not to mention absurd. When comments like these first came in, I questioned whether the visitor was telling the whole truth. But since this is an anonymous forum, there truly is no incentive to lie. This, unfortunately, means that credit card companies are going out of their way to turn consumers with good credit into subprime or lower level borrowers. This, in turn, allows them to gouge them with fees today and charge them higher rates on everything from mortgages to car loans in the future.
Here’s another complaint from a Chase credit cardholder named Bob:
“On 7/29/2009 Chase closed both my Wamu credit cards (Despite having maintained perfect account status with Wamu and Chase )with a notice saying that “too few cards were paid as agreed compared to total cards” and“Total available on bank cards were to low I have never been late or over limit and the balance on my credit cards is less than 3% of the total value of my cards,When I called them on 08/04/2009/the girl was extremely aggressive about it and said “call Experian, we can’t help you.Experian says Chase never requested any credit info on me.and my cards and accounts are all Paid as Agreed.I called them back on 08/10/2009 after they sent me a new Chase card to replace my Wamu card and they told me the same thing Experian said blah-blah which I now know is a lie.Now they are going to mess up my credit (which took me a long time to build up)by closing the accounts for reasons they made up.I would think this is at the very least fraud.”
While I don’t if this is fraud, it is surely another example of banks wrecking some one’s credit so they can charge them more in the future.
Now, I don’t mean to delve into the world of conspiracy theories, but banks surely know that what they are doing is detrimental to credit scores and that lower credit scores can be used to charge higher rates (and annual fees) once the new credit card laws come into effect.
Based on these two stories, and a few other shared with me recently, credit card companies seem to be closing credit card accounts or slashing limits if a person uses their credit card for a large purchase or if they don’t use it enough. Personally, I pay my credit card about 5 times a month these days just to be sure nothing like this happens. Its surely a hassle, but it beats the heck out of getting slammed by a credit card company for no good reason.
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August 20th, 2009 at 11:35 am
Good for you . They closes the card with the least int. reduced my credit limit on the other. to make it look like i was over the half mark on my charge limit. I pay them every 4 days got it down. will be paid off next month. they are still charging me finance charges on the closed card.!@#$. but I’m paying min. till i get the other paid off or till the law passes next year. that way on your report it still looks open. your credit report will say its opened till its paid in full by then I’ll have a better credit card. NO MORE CHASEEEEEEEEEEEEEEEE
August 28th, 2009 at 9:35 pm
I can so relate to these people’s situations; I too, had never missed a payment, never went over the limit with CHASE. I had a 5,000
cr limit and a 0 balance and they
CLOSED my account. Based on my other Chase card that they RAISED the mandatory payment to 3x the amount. This is maddening and like the other gentlemen said – you are helpless – and because all of us are in FEAR of our credit score being affected; THEY HAVE ALL THE POWER -; But we have done it to ourselves – IF NONE OF US HAD CREDIT CARDS – THERE WOULD BE NO CREDIT ISSUES FOR OUR GOVERNMENT TO SCAM US INTO THINKING THE BANKS ARE IN TROUBLE
August 31st, 2009 at 9:45 am
The real shame is the effect this will have on your credit score, but at least you were among the lucky that wasn’t on the hook for tens of thousands of dollars. I would suggest opening a new credit card with a different company to help minimize the damage to your credit score. As much as we’ve all come to dislike credit cards, the fact of the matter is that our credit score plays a big role in our lives.
September 8th, 2009 at 3:47 pm
chase did a number on me as well. I have a limit of 1k, I had close to the limit on my card, one late payment brought me over. which meant an over limit fee. the next month I had a minimum payment of 200, I couldnt afford the 50 before so couldnt afford this for sure. they then added another late fee, and somehow added the $200 missed payment to the total? I could see adding it to the minimum.. but the total? the next month I payed the minimum, but couldnt afford the still 200+ due each month. two months later the fees bring the total up to close to 1700. meaning about 900 in fees for a 1k limit card in just a couple months. This has completely put me off on credit cards, although maybe I’ll try a non chase card in the future as it seems chase is the worst in ripping people off.
September 9th, 2009 at 10:04 am
Bill,
This is a really disheartening story. Have you tried to call them and see if you can negotiate the penalties and lock in a lower rate. You should qualify for assistance from the hardship department.
September 14th, 2009 at 8:56 pm
I received some balance transfer checks from one of my Chase credit card accounts. I used the check to make a payment of $25,000k to my Bank of America credit card, to get a lower interest rate with Chase. When BOA went to cash the check to cover my payment, Chase DENIED the check. So I got hit with a $40 check returned fee. But to top that off, BOA bumped my entire balance to 19.9% instead of 10.9%. BOA said when I made the payment that my balance was cleared, but when the check was returned, they had to put the balance back on my card under “cash advance” now at 19.9%. They said this is “standard practice with all banks”. So I got screwed by Chase AND BOA. I have used those balance transfer offers many times in the past. Didn’t realize that they could decline payment on them. Guess I learned a valuable lesson.
September 15th, 2009 at 8:53 am
I wouldn’t settle for that answer. I would definitely get on the phone with BOA and see if you can get a representative to assist you. Although they could have theoretically punished you with a 29.99% APR, a 19% rate is still quite high. And as for Chase, this is not the first time I’ve heard of them failing to honor balance transfer checks. Everyone needs to shred these.
October 19th, 2009 at 2:03 pm
This has happened to me I have been a loyal customer with first Providian and now Chase, my credit score is good and I have always paid my payments on time never paid late now Chase wants to lower my limit, how can they do this? I called them and of course the rep gave the same stupid reasons as was on the letter. Once I get this paid off I will never do busines with Chase again!!!!!!!!!!!!!