So, the notoriously bad Bank of America’s gone after me now.
The timeline of this particular nonsense:
Step 1 - I purchased a house.
Step 2 - I called Bank of America. Did my change of address, reason on CofA “Bought New House.” Was offered a 0%-for-one-year balance transfer, took them up on it.
Step 3 - Used my credit card otherwise (buying things a new house needs).
Step 4 - Got a letter yesterday from Bank of America saying that based on “a routine credit check due to increased usage of your cards”, they were chopping my credit line by ~25%.
Step 5 - Called them up and found out that the reason for this is that their “credit check” shows a $6,000 phantom; they’re claiming I owe them the balance transfer amount (correct) but also claiming I owe it to the two smaller cards that the transfer paid off (no longer correct). In other words, they claim I have roughly 40% more debt than I actually do. Not only that, but based on this erroneous information, they just damaged my credit score by reducing my available credit, making it that much more difficult for me to do other credit-related things. This actually took two calls; the first person, who I will refer to as “bubblegum-chewing blonde bimbo #1″, simply kept going round in circles saying “well if the computer program says this is what we should do this is what we do”, and hung up on me when I demanded to speak with a manager. The second person, who I will refer to as “Useless Tyrell #2″, basically repeated the same thing, then informed me that “all the supervisors are unavailable” and that he would “put a note in my file” and one of them should give me a return phone call in 48 hours or so.
Bank of America sucks, period.
Web,
The card companies have been slashing credit lines across the board. Makes sense, given that American consumers in general aren’t great credit risks right now. And I highly doubt that a supervisor would have been able to intercede for you, even if you were transferred to one. This stuff is done algorithmically. I also wonder how much damage was done to your credit score by the lowered available credit limit — have you checked? It could be minimal.
Comment by DaveinHackensack — November 11, 2009 @ 6:04 am
Dave,
If this had been a random credit audit and lowered credit line, that might be different. As you say, these are tough times. My credit card issuer raised my APR and I have no objections to that because their reasoning was “we’re sorry; times are tough.”
But what is immensely frustrating to Web and I (I’ve not been bitten by this myself, though I’ve commented on it here and there) is when they use the fact that you’re using their service as a justification to limit their service. If you only have a $16,000 line of credit when you’re not using the credit, then that’s not really a $16k line of credit, is it?
As circumstances change, issuers and banks should certainly have the right to change contract terms, but they should not be able to do so immediately.
My personal take is that there should be a 6-month or one year waiting period between an announced change and the change taking effect. Further, any APR increases should only apply to new debt. Give people a little time to get their house in order so that they can try to make alternate credit arrangements. With this in mind, maybe a 1-year lag is better than 6 months since we’re talking about not only paying off what you owe, but also getting the credit score back up to get credit elsewhere.
On a sidenote, my college roommate (and Web’s former housemate) Hubert had something similar happen to him back before the credit market hit the skids. We should not be too tempted to blame bank shenanigans on the current credit crunch. They’ll use whatever excuse they can find. And honestly, at this time, they should be placing more rather than less value on people like Web that do not have a history of financial irresponsibility.
Comment by trumwill — November 11, 2009 @ 11:09 am
I suspect they are constrained in their underwriting in certain ways which prevents them from only issuing cards to the good credit risks. If they could just give cards to folks like you, me, and Web, etc., they could probably charge us lower interest and fees.
Comment by DaveinHackensack — November 13, 2009 @ 2:00 am