Bank of America bumping rates up and/or cutting credit limit

[compuwiz1]

It's a trend. My Amex got cut from $15k to $8100. The only reason they gave is that they are adjusting for the current economic conditions. I've never had it anywhere near limit and always paid on time.

 

[fornax]

Originally posted by: JohnOfSheffield

I've never had a credit card in my life and i never plan to.

If you are constantly using more and more of the credit then you need to cut down on your spending, spending more than you earn will eventually ruin you.

You're missing on a lot of stuff. I never carry a balance and pay off my 4-5 CC's every month, but I get several thousands of dollars every year as cashback, travel to Europe or other destinations every year for nearly free, have the warranty on most of the stuff I buy doubled, get free theft/damage protection, rental car insurance, etc., etc. Also, it is very hard to book a hotel, a ticket or a car without a CC.

Sure, you can live without a credit card but why? Credit cards might be the invention of financial institutions, but you can beat them at their game.

 

[dbk]

i just joined a credit union

but as far as boa is concerned (among other banks) things will reverse themselves as the economy recovers - no?

 

[postmortemIA]

Wells Fargo started doing this too, for 5.x to 21.x%... wow!

 

[Kadarin]

I just picked up a new credit card from Wellsfargo that has a 18K limit, 0% for 1 year, and 4.99 permanent after that. *shrug*

 

[Hayabusa Rider]

It's permanent subject to change. I had two cards with low fixed rates. The they tripled in interest. No credit card is locked into one rate forever. In my case I refused to be screwed and dumped both companies. They need me more than I need them.

 

[ebaycj]

Originally posted by: Hayabusa Rider
It's permanent subject to change. I had two cards with low fixed rates. The they tripled in interest. No credit card is locked into one rate forever. In my case I refused to be screwed and dumped both companies. They need me more than I need them.

I've always thought it was ridiculous that the CC Companies can get you to sign on the dotted line with a pitch of "5.9 interest fixed-rate for life" or similar; Then a couple years down the road, they are able to change the terms in any way they would like, without consent of the cardholder.

They should not be able to do this. It should be illegal to have a contract that allows the terms of said contract to be changed by anything other than the mutual agreement of all parties involved. They do it with mortgages, why not with credit cards?

 

[ebaycj]

Originally posted by: fornax

Originally posted by: JohnOfSheffield

I've never had a credit card in my life and i never plan to.

If you are constantly using more and more of the credit then you need to cut down on your spending, spending more than you earn will eventually ruin you.

You're missing on a lot of stuff. I never carry a balance and pay off my 4-5 CC's every month, but I get several thousands of dollars every year as cashback, travel to Europe or other destinations every year for nearly free, have the warranty on most of the stuff I buy doubled, get free theft/damage protection, rental car insurance, etc., etc. Also, it is very hard to book a hotel, a ticket or a car without a CC.

Sure, you can live without a credit card but why? Credit cards might be the invention of financial institutions, but you can beat them at their game.

Credit-Card-Style Debit cards allow you to do anything you could do with a normal CC, assuming you have the $$ in your Checking account to cover your spending. Some Check Cards even have cashback/perks plans, though they are usually not as lavish as the high end CC plans.

Personally, I still think that Debit + Check card is the only way to go (with the CC in reserve for emergencies only). IMHO, credit (debt spending) should only be used for houses (cars may be OK too, but only if absolutely necessary).

 

[postmortemIA]

Originally posted by: ebaycj

Originally posted by: fornax

Originally posted by: JohnOfSheffield

I've never had a credit card in my life and i never plan to.

If you are constantly using more and more of the credit then you need to cut down on your spending, spending more than you earn will eventually ruin you.

You're missing on a lot of stuff. I never carry a balance and pay off my 4-5 CC's every month, but I get several thousands of dollars every year as cashback, travel to Europe or other destinations every year for nearly free, have the warranty on most of the stuff I buy doubled, get free theft/damage protection, rental car insurance, etc., etc. Also, it is very hard to book a hotel, a ticket or a car without a CC.

Sure, you can live without a credit card but why? Credit cards might be the invention of financial institutions, but you can beat them at their game.

Credit-Card-Style Debit cards allow you to do anything you could do with a normal CC, assuming you have the $$ in your Checking account to cover your spending. Some Check Cards even have cashback/perks plans, though they are usually not as lavish as the high end CC plans.

Personally, I still think that Debit + Check card is the only way to go (with the CC in reserve for emergencies only). IMHO, credit (debt spending) should only be used for houses (cars may be OK too, but only if absolutely necessary).

problem with that is you are generally liable for your account, so if somebody gets a hold off your debit card, good luck with recovering your money.

 

[BrownTown]

Originally posted by: postmortemIA
problem with that is you are generally liable for your account, so if somebody gets a hold off your debit card, good luck with recovering your money.

yeah, this is the ONLY reason I use a credit card ever. I really don't even understand the point of a credit card since nobody but the biggest of idiots actually carries a balance on it, so why not just use a debit card? But they problem is that if someone DID get my debit card they could clear me out, so I use my credit card for anything online.

 

[dullard]

Originally posted by: BrownTown
yeah, this is the ONLY reason I use a credit card ever. I really don't even understand the point of a credit card since nobody but the biggest of idiots actually carries a balance on it, so why not just use a debit card? But they problem is that if someone DID get my debit card they could clear me out, so I use my credit card for anything online.

Points of CCs:
1) As you mentioned, when there is a problem with a debit card, you are out the money and fees and penalties until your resolve the problem. With a credit card, the store is out the money until they resolve the problem (assuming you dispute the charge). With a credit card, you cannot be charged fees or penalties if you win (not true with a debit card, you can go negative and still be charged fees even if the charge was incorrect).

2) Federal security protections. By federal law, your purchases are protected. Someone can steal your credit card and you at most will pay $50. Some banks voluntarilly protect debit cards, but they can just as easilly voluntarilly remove those protections just like they are voluntarilly bumping up rates and cutting credit limits.

3) Federal "quality" protections. By federal law, if you don't get what you paid for with a credit card then you get your money back. Not true with a debit card. Some banks may voluntarilly give you the same debit card protection, but they may revoke them at any time.

4) Generally better rewards. Credit cards usually give more rewards, more cash back, more insurance, etc. than debit cards. If I buy anything with one of my credit cards, I get a free double-length warranty, do you get that with your debit card? If I rent a car, I get that ~$15/day insurance for free by my credit card, do you get that with your debit card (note my car insurance does this free, though)? I get free travel insurance with flights too. 1%-5% cash back is rare with a debit card. I also get $10 off coupons almost monthly with my credit cards at stores that I routinely shop at. I've never gotten that with a debit card.

5) Pay your bills when you want. Credit cards give you the flexibilty to pay your bills in one lump sum interest free for up to 6 weeks. This can really help you out through a temporary bind. You really don't get this flexibility with a debit card.

6) Build credit. Credit cards build credit which lowers prices for everything from loans to insurance and may open doors to jobs and apartments. Try getting into a ritzy apartment with bad credit or try getting a financial job if you can't show that you can handle your own money. Debit cards do nothing for you here.

The one drawback: you have to have responsibility with a credit card. Don't use them as a loan, since they do not have good loan terms.

 

[dullard]

On topic, BofA just slashed my credit limit by just over $20,000. I don't mind though since I averaged $79/month on it since Dec 2005 and most of those months had a $0 balance. I averaged $11/month on that card since June 2007.

 

[PricklyPete]

I have a BoA card that I use occasionally...but keep paid off. The credit limit is 25K and I haven't seen any movement on the credit limit recently...maybe I'll make the next round of "cuts"

 

[Viper GTS]

I have yet to see cuts on any of my cards either. I have several cards with fairly high limits ($20K+) including an Amex and a BofA card. No cuts to either, no notices of rate increases (and my BofA card is sub 10%), and no offers from Amex to close my account.

I won't be surprised if it happens, but nothing yet.

Viper GTS

 

[JS80]

Translation: we think the economy is going to go to shit and you're going to lose your job which means you will probably live off your credit card so we're going to cut your limit. We're also raising your rates so you pay off the balance more quickly which will further reduce our risk.

 

[zephyrprime]

There are going to be more defaults with these higher rates.

 

[iGas]

It is odd that you guys getting the shaft by credits companies.

My banks automatically bumped my 3 credit cards up to total of more than 50K and lowered my rate with out me asking for it (I don't carry a balance at month end). Last year it was a total of less than 30K.

 

[AFMatt]

Originally posted by: zephyrprime
There are going to be more defaults with these higher rates.

I wouldn't doubt it. For some, the rate increase is only half the problem. I dont know if others are following suit, but Chase recently raised minimum payments from 2% to 5% for people who have been carrying a large balance for some time.

 

[senseamp]

they sure as hell didn't increase interest rates they are paying me on my savings

 

[BrownTown]

Originally posted by: dullard
6) Build credit. Credit cards build credit which lowers prices for everything from loans to insurance and may open doors to jobs and apartments. Try getting into a ritzy apartment with bad credit or try getting a financial job if you can't show that you can handle your own money. Debit cards do nothing for you here.

See, this is something I think people over play alot. I really don't give two shits what my credit score is, and I'm not sure why people are so obsessed with it.

 

[IHateMyJob2004]

checking accounts need to average $750 over a month or there will be a $12 charge.

This is hte beginning of the end of BoA. All a bank needs to do is make customers happy. That is their moat. Goodbye moat.

 

[AFMatt]

Originally posted by: BrownTown

Originally posted by: dullard
6) Build credit. Credit cards build credit which lowers prices for everything from loans to insurance and may open doors to jobs and apartments. Try getting into a ritzy apartment with bad credit or try getting a financial job if you can't show that you can handle your own money. Debit cards do nothing for you here.

See, this is something I think people over play alot. I really don't give two shits what my credit score is, and I'm not sure why people are so obsessed with it.

Your credit score affects your ability to get lower rates for home and auto loans (and, of course, even more credit cards). To most people, that is the big deal. A couple-few percent higher on a mortgage can easily add up to a $100k+ difference over 30 years.

Other than loans, some landlords use your credit score to decide if they should rent to you or not. It is also used by some utility companies to determine how much, if any, of a deposit you will need to make in order to start your service, or if they will even give you service in the first place. Cell phone companies also use credit scores to determine if they should let you sign on for a regular plan, or make you use prepaid.

 

[dullard]

Originally posted by: BrownTown
See, this is something I think people over play alot. I really don't give two shits what my credit score is, and I'm not sure why people are so obsessed with it.

I don't fully understand why you'd be so careless about it. Do you like paying more for loans? Do you like being denied? Do you like your insurance bills to be far more than mine for the same thing?

No, you don't have to be a credit-score-maximizing-nazi. But ignoring it completely is an easy way to make your life noticibly and significantly worse.

Even if you don't care about #6, I gave you 5 other good reasons.

 

[dardin211]

Wife and I, both have separate BofA credit cards, we got the letters a few weeks ago, that our rates would go from fixed 7.9% to a variable rate currently at like 13%. We always pay more then the min, keep a small balance on them, never been late or anything. We both have excellent credit scores, 740 average. We opted out and shredded the cards, which lets us pay off the existing balance at our current rates, unless we use the cards again, then the rates go up. I shredded both cards that very day and will never get another card with them again.

My mom also got the letter from BofA last week for her credit card with them.