Credit Crunch - I am just amazed at this stunt.. Oh yea other family news shared too

[Guest Close Quarterbore]

I guess I will share here that my wife and I are expecting a new addition to the family come next April. The new baby is a boy so I will have two kids to a previous marage (Girl that is 11 and Boy that is 8) plus a 4-year old girl with my current wife.

Well, we have been paying down our debt as quick as we can and we paid off several of our credit cards and stopped using them as we try to cut back to get ready for the chances that we are going to be going through. Well, we got a call from not one but TWO of our credit cards that they were reducing our credit limits!

One bank, Advanta reduced a card that I had a $15,000 credit limit to $3,000 and Capital One reduced a card that had a $10,000 credit limit to a $2,000 limit. I know available credit is tight but we also liked having that credit available if we had an emergency and both banks said there was nothing we could do to appeal this change.

I am angry enough to cancel both cards but at this point in life we need to have this available in case we need to get through any short term situation but going from $25,000 of open credit to $5,000 in those two cards sure was an eye opening experience.

Has anyone else had this heppen to them YET?

[Gracey Member Find all posts View Profile Close Gracey]

Your not the first I heard this happen to. I don't understand what's up with that though? If you kept your outstanding balances running they would have left your credit limit alone. Works against common reasoning I guess?
I wonder if you opened up a new card if they would give you another large credit limit?
Congratulations for the new baby!

[ArtsieAng Super Moderator Find all posts View Profile Close ArtsieAng]

Ken,

Congrats on the new baby!!!! How wonderful!!!

I'm sorry to hear about your credit being cut, and it couldn't have come at worse time. What a shame.


I have no idea if any of our credit cards have cut our credit line. I'm not aware of it, if they have. However, it's also possible that I might have missed notification, if it had been sent. Guess I should take a look.

[Guest Close Quarterbore]

Thanks! Ang, yea we were shocked as while I would never want to have that much sitting on the cards it was nice knowing it was there. We have one more big card and that one is through the credit union so hopefully the credit union will not pull the same stunt too.

The first one did it about 3-weeks ago and the second I just got the call this morning

[bigfrank Administrator Find all posts View Profile Close bigfrank]

Ken it's good to know you still have it in ya,

I would cancel the card and stick with just Amex and an airline card that racks up miles.

[ArtsieAng Super Moderator Find all posts View Profile Close ArtsieAng]

Ken

The first one did it about 3-weeks ago and the second I just got the call this morning
Today 11:03 AM

Oy, that's really too bad! I fear that there is going to be some very difficult times ahead.....My DD's best friend called me yesterday hysterical crying because her college loan went up to 11%. She feels that she can no longer afford the loan, and is going to be looking for another college, after finishing out this semester. Currently she is in the same school as my DD......We both felt so badly that there was nothing that we could do to help her. We were crying, too.

[joycapecod Silver Contributor Find all posts View Profile Close joycapecod]

I have also heard about some banks freezing Home Equity Lines. We have a small line ($25,000) and don't use it. Our home is paid for other than the line, but from those I have spoken to who DO use their line it was because the Bank felt that with their outstanding first mortgage and the line, that the value of the property in a depressed market would not cover the debt.

My husband is in the auto industry (on the manufacturing side) and said that some of his dealers are complaining about clients with scores in the mid 700s that are putting 30% or more down cannot get loans from banks to buy cars.

Banks are reining in lending while taking the bail out monies and buying up other banks. The bail out monies from my understanding was to assist in the credit crisis not to make larger portifolios....

This will get much worse before it gets better IMHO.

Joy

[Jya-Ning Silver Contributor Find all posts View Profile Close Jya-Ning]

Good for you, although that is a lot of kids.

Jya-Ning

[StressCadet Senior Member Find all posts View Profile Close StressCadet]

Thanks! Ang, yea we were shocked as while I would never want to have that much sitting on the cards it was nice knowing it was there. We have one more big card and that one is through the credit union so hopefully the credit union will not pull the same stunt too.

The first one did it about 3-weeks ago and the second I just got the call this morning

The best CC I have is through my credit union. If I want to float a balance-I use that one as the Int rate is very low. Well...my credit union is now under conservatorship by the NCUA.

The others are like yours-high credit limits that I will never reach and I pay off monthy. I check periodically to see if they have lowered my limits-but so far so good.

Congrats on the little one!

[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

And I thought you were all wrapped up in your work. No credit limit reductions here yet, tho CitiAmex informed me recently that they were cancelling my card due to non-use.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

Congrats Ken. I love babies.

Interesting news about the credit lines. I didn't know that credit card companies were reducing credit lines. But, it does make sense.

We are experiencing the largest credit crunch in history. My guess is that it severely impacts the living standards of all Americans for several years to come.

Yuck. We are just finishing the go-go 20's and we are heading into the 30's.

[Glitter Brunello Super Moderator Find all posts View Profile Close Glitter Brunello]

Ken,

Congratulations!!! My Dad always says that babies come with a loaf of bread around their necks... meaning that even if you think you can't afford them, some financial blessing will accompany their arrival. He loves to tell about how when we were each born, he got a new client, or some similar boost.

I am afraid to check what may have become of our credit limits. And I know I am kicking myself, and HARD, for forgetting to reopen a Home Equity Line when we refinanced a few years ago...

I have a friend who is a banker, she said she's been "talking people off ledges" all week, having to turn down voluminous loan requests. I just got a good email on the subject, I will post it.

[Guest Close Quarterbore]

Obviously it is a good time to get out of debt as much as possible but realizing that if you remove the debt that you may also lose the credit too makes it a tough decision to pay off the debt or keep some money in the bank and pay the interest.

I am glad we do not need to apply for a mortgage or buy a new car soon!

[shaggy Moderator Find all posts View Profile Close shaggy]

This just happened to me yesterday. GE Money ? Didn't even know who they were took my Lowes card down to what I owned because a dumb cashier did not put the add on for more materials on the same promotion. ( year no interest no payments) Stupid me didn't open the bills as I knew they weren't due yet. When I got the letter I called Lowes and explained what happened and she immediatly gave me back my $6K line and took away all the late fees and finance charges. She was so nice maybe because I told her I would pay it all off now and cancel the card if she'd rather. Then I got another letter in the same batch of mail from GE Money saying they had taken my Belk card down to $100 !!! I don't even owe them anything? What a crock. shaggy

[PigsDad Senior Member Find all posts View Profile Close PigsDad]

This thread is really interesting. None of the 4 credit cards that we use have been hit yet -- as a matter of fact, they each started w/ around $5K limits and have all grown significantly in the last several years (all automatic -- we never requested an increase). We have always paid them off in full every month -- are only the people who regularly carry a balance being hit?

We also have large HELOC with no current balance, but I did use it fairly often last year while finishing our basement. I live in an area where we didn't have the huge real estate bubble like other places in the country. Our home values are going down, but not at the rate as some of those hard-hit areas. Any possibility the CC companies are looking at geographic data when reducing credit lines?

Kurt