Friday, April 20, 2012

the limit does not exist

Actually, in this case, a limit DOES exist and I am not happy about it.

Yesterday afternoon, I received an e-mail from Credit Card #1 stating they were dropping my credit limit - by $2,000!!!

As you can imagine, I totally flipped out. I immediately called the company and pitched a fit. My main problem with the decision was my new limit ($3,000) only spared me about $200 from maxing the card out. In addition, I've never made a late payment on the card, have paid the balance off before in the past, and used the card actively. So what gives?

The customer service rep told me they had pulled my Experian credit report as part of an "Annual Credit Profile" (which, in the four years I've been with the company, is the first I'm ever hearing of this procedure). Having just pulled my credit report last week, I knew exactly what Experian had reported, and I couldn't see any negative reasons why they should drop my limit that much. The main reason was because my "debt to credit utilization ratio was too high". I know my utilization was a bit high (about 43% - read about it here), but, doesn't knocking my limit down so much make the situation worse since now I'm almost maxed out on one card? Apparently this company doesn't think so.

Other reasons were the length of time my accounts have been opened (nothing to do about that but age) and the amount of my payments (the minimum, right now while on my payment plan) in relation to the balance. Geez. At least I pay my credit cards (and on time, for that matter!).

I had half a mind to tell her to cancel the card right then and there, but then that's not going to help my "length of time accounts have been opened" situation. Instead, I asked her what I could do about it. There are two ways to appeal the decision. The first is to make a large, lump sum payment on the card (not happening, since we're still rebuilding our savings account). The second is to file an appeal based on income. So after work today, I have to run over to the UPS Store and fax over copies of all my assets (savings account, retirement accounts, last paystub) to the company with a request for my credit limit to be restored either to its original amount ($5,000) or another amount. I'm going to ask for my original limit back, but if not, at least increased to $4,000.

The one good thing that came out of this scenario was I'm totally re-motivated now to pay these stupid things off as soon as possible so I never have to deal with a credit card company and their sneaky tactics ever again. Oh, and I found out my FICO score was 709. Still lower than last year by about 30 points, but not as bad as I thought it was.

Anybody else have a similar experience before?

Friday Spending:
$5.97 Dunkin Donuts (breakfast)
Friday Saved: $0.00

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