Can they do this?
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| Tue, 06-21-2005 - 4:24pm |
Let me answer my own question, OF COURSE THEY CAN. Still, I'm pretty irritated. I have had a GM credit card (can't remember tied to which bank) for ages. I got it on the off chance when I bought a car it would be a GM and I could use the reward program (didn't happen, I got a Toyota). Anyway, it had a 0 percent tinterest and a credit limit of something ridiculous like 15,000. The zero percent was supposed to run out last fall so I had pretty much paid it off. Then it didn't. They extended it so I parked some debt there. About $5,000. Over time I have been paying way more than the minimum to get rid of the debt and maybe used it a couple times for purchases when I needed to use a credit card. Again, always paying that part off. Every month they have been asking me if I wanted to do balance transfers but I never did. Then out of the blue this month they not only raised my interest rate to 15.9 percent they actually LOWERED my credit limit to about $20 over what I currently owe. I called to ask why and they said it was my "purchase history" and my amount of debt. That makes absolutely no sense because I rarely use the card, or any card for that matter, and if I do the balances are paid off within a month or two. And as far as my big cc debt, it is roughly the same as it has always been and has been parked in low interest cards so I can ultimately pay it off.
Actually it doesn't matter because I want to get to the point where I don't use credit cards except for reimbursable travel or major purchases that can be paid off as quickly as possible. Still, it's the principle of the thing. I immediately transfer the $5K to a card with zero balance and a 2 percent interest rate. Now watch. GM will probably be calling and offering the moon since I'm suce a "good" customer.
Sorry for the rant but I've never heard of such a thing as lowering your credit limit so drastically.
One question: should I cancel that card or leave it open with a zero balance. Wouldn't that be better for overall credit score?
Thanks, Jenny
PS I tried to post this earlier but it never showed up.

If you read my AMEX post, you'll see that they do this alot.
In anycase, it is better to leave it open, especially if you have had it for a long time.
Long standing accounts, used or unused, increase your score.
Hey there - sorry they're being such poopy heads about this.
All my best,
Danni
That's really interesting about the "nowhere else to turn." I bet that was the rationale. See, I handle the bills and almost every purchase in our house. Over the past year or so as I am trying to pay down our credit card debt -- rather hefty because we put an addition on our house and racked up some big expenses -- I have been putting all of the parked debt on cards in my name. Just easier. Well, I work part-time and make significantly less than my husband. Sooooo, if they looked at the amount of debt that appears to be in my name versus my salary it would look like we were on a sinking ship.
When we transferred the blanace off the GM card we used a carde that was in my husband's name. I bet that is why my credit score has been dropping, too. If I were to check his score is probably fabulous.
This probably isn't the wisest thing because I suppose I could always someday get "stuck" with all the debt that is in my name only. Maybe I'll tansfer some other things over to cards that are in my husband's name. Not that I plan to divorce him -- but hey -- the night ain't over yet. LOL Jenny
All my best,
Danni
I'm pretty sure salary isn't on there exactly (or they don't look at that when extending credit!
Becky
CL of 4th, 5th & 6th grade Scoliosis
Well, even if they don't look at salary I bet they do look at the fact that we have about 35K in unsecured debt and the vast bulk of it is in my name alone, just because I have been moving stuff around to find low interest rates while I pay it off. I also have a car lease which is in my name because my 99 HOnda was paid off and my husband now drives it so I could have the newer car since I do all the kid toting. Hmmmmmm.... I am on a debt redpayment plan that pays down debt at about 1,000 a month. At that rate I will be out of debt completely in 3 years. I am hoping to get to a better comfort level in two or less. My youngest starts kindgergarten in the fall so no more preschool tuition but we do have to pay for extended day and afterschool for three kids. PLus the summer kills us every year with care for three. When she is in first grade there will only be afterschool so I will have a lot more to put towards debt. In the meantime I would like to get my credit score back up over 700.
Any suggestions?
I can move a little more of the parked debt over to the card that is in my husband's name but I think we are both now on it so I'm not sure that will accomplish much. I will keep the GM card open with a zero balance as well as some of the smaller retail cards (Gap, department stores, etc.) They are paid off. I have been closing them out when I pay them off. I also have this Sears card (I hate Sears!) that has a $100 balance from some clothes I bought for my kids. I was going to pay it in full when it comes this month and then close it. I checked and it has something outrageous like 20K credit limit. It would seem that would help. Same with Target, it has something like $15K open to buy with a balance of $900 (stupid I know). Still, with that kind of unused credit wouldn't it help raise my credit score?
I wouldn't worry about this since my ultimate goal is to not use credit cards at all except we might be moving to a different house (cheaper in better school district next spring) and while the money we make on this one would be great to pay off debt, I would hate to get screwed on trying to get a good mortgage rate.
Thanks for letting me ramble. I'm open to any and all help. I feel a little guilty whining because I know others on this board have bigger issues than mine.
Jenny
Jenny - you're not whining, so don't even worry about that.
All my best,
Danni
Quick question:
I just transferred my Target balance so it is now zero (and cut up card so I will not be tempted) to the card we used for the GM transfer. There is now about 6K on that card. It was in my husband's name only and he added me so I could do the trasnfers (he is hopeless in this department) Should I now take my name off it? Will that make a difference?
Thanks, jenny