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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