The Credit Crunch become real

[Jon Miller]

First, I have always had great credit (rarely dipping below 750). In fact, despite being a student I have generally had multiple credit cards with ~10k credit limits and fairly low interest rates.

The credit card that I have been using the last couple of years (with the others just held in reserve, for big purchases/etc) just dropped me from 8500$ to 600$. In their letter they say it isn't based on credit or performance (and that no credit check was done).

I still have credit cards with high limits. But it is still really annoying, because I think that I have more than 600$ of automated payments on it. Generally I have been fine leaving a few hundred on the Credit Cards (just out of laziness).

This one I now think that I can't leave any balance on even on a weekly basis, or else I need to change some of my automated payments to other Credit Cards (all my bills are set up as automated payments right now, except the credit cards, it is nice).

JM

[Lorizael]

I've got one of those black ones made of titanium and hookers.

[snoopy369]

My nice low-interest card that I rarely carry much of a balance on is raising my interest rate by almost double (going from 7.9% or so to 14.9%), for no reason other than their cash flow or whatever.

Not sure why they want to decrease their cash flow by ensuring I don't carry a balance of any sort on it, but that's their call I guess

[Arrian]

The credit card that I have been using the last couple of years (with the others just held in reserve, for big purchases/etc) just dropped me from 8500$ to 600$.

Holy crap, I've never see that... hell, I've never even heard of it.

...

I'm looking into refinancing my mortgage, because rates are nice now. The trouble is that the house value has likely dropped so far that we no longer have 20% equity. If the online value estimators are even close, we've probably got ~15% equity.

I'm trying to work out something that allows us to refi with less than 20% and still avoid PMI. I'd love to do it, because it looks like I can refi my 30 year fixed 6% mortgage into a 20 year fixed 4.875%, and have essentially the same monthly payment.

-Arrian

[Jon Miller]

That's weird, my bank just upped my line of credit limit another $2K without me asking...

Then again, this is a Canadian bank and my credit is above 800.

My credit rating is occasionally above 800, not sure if it is right now...

JM

[Jon Miller]

I have actually read online, and apparently what people had never heard of previously is happening to many other people than just me now.

JM

[Blaupanzer]

I used to make extensive use of credit with relatively quick payback. One of my cards grew from $5000 limit to $25000 limit. As I wound down using the cards and mostly paying them off, that card cut my limit from $25000 to $10000 solely because I wasn't using the card. Since they had raised it based on my use, I didn't think much of it then, mid-1990s. However, it does happen.

[DanS]

Jon: What is the credit card company, if you're willing to say?

[Jon Miller]

I didn't have a balance this month (a couple hundred was on it when I paid it off last night), and even a couple months ago when I had a balance it was ~1000 which is a drop in the bucket compared to the ~50k that my 4 credit cards would allow me to borrow.

The one that dropped it like that was my CC from Geico. I had another one just cancel, but I hadn't been using it. The one just dropped, as I said, I was using for everything (that means I put on ~1000$ per month)

Once more, they said that this wasn't based on any looking at credit scores or behavior.

JM

[DanS]

GEICO? Interesting. As you may know, that's a Berkshire Hathaway company (Warren Buffett is the president).

[Jon Miller]

Online I have heard of other companies doing it also.

JM

[DirtyMartini]

Arrian,

I'm almost assuredly upside-down on my mortgage right now, since I bought right before the bubble completely burst. I closed last July. My bank just called me and offered a rate adjustment -- no refi, just an adjustment. Sign one form, pay 500 bucks and drop the interest rate from 6% to 5.5%. I'll make the 500 bucks back in in about two months. Nothing to stop me from doing a full refi in the future. You may want to ask your bank if they offer anything similar.

[rah]

They're probably not the holder of the paper. They'll handle transfering the paper to someone else and pocket the 500.

[DirtyMartini]

That's why I asked the loan officer -- "what's the catch". "no catch" he sez.

[snoopy369]

The bank/paper holder may be getting incentives from the Fed to refi mortgages, I imagine.