Posted on 11/16/2009 3:18:55 PM PST by jessduntno
To whom it may concern;
If I reduce my credit-card balance, American Express will cut my credit limit to a much lower “comfort limit.” If I don’t make a big payment, my card will be suspended. If I DO make the big, unexpected and unannounced payment on demand, my “comfort level” may be capriciously dropped anyway, leaving me both without operating capital and without a reserve.
My “utilization rate” is a key factor in determining my credit scores, and the bank has crashed my credit rating. I am a small business owner and as a result of the usurious and unfathomable actions taken against me by my own banks, my credit score has continued to drop over the past 13 months. As a result, my interest rates on all of my cards have gone up, and minimum payments are almost doubling because it now looks like I’ve maxed out my cards, as a result of the limit cut-backs.
Some of the cards we have had for years have now gone to 30%
Card issuers and banks have fattened their accounts against a coming storm at the expense of those of taxpayers and those of us who have paid on time for years. They literally hold all the cards, and are acting like the Soprano family, raising or lowering rates for no cause. American Express, Citigroup Inc., JPMorgan Chase & Co., have all cut credit limits to guard against risk and prevent delinquency and charge-off rates.
If I can not borrow to purchase equipment and supplies for resale, I can NOT stay in business. I know I am not alone in this. I have paid in full and on-time for the last 20 years. I am careful to keep my balances at half of my limit, but reduced credit limits on my cards have made that impossible. I’m angry; I’ve always been proud of my credit history and now it’s gone, not because of something I’ve done, but because of the “new banking policies.” The banks and card companies have brought me and many countless other small business owners to the brink. I will make arrangements to pay this debt, but will no longer be held captive. I will cut costs, lay off two more employees, reduce inventory and move to a cash only basis. This means a drastic reduction in the size (and net worth) of myself and my business, less income and permanent unemployment for laid off workers. Sounds like the overall economy; the “jobless recovery” we keep hearing about, doesn’t it?
Now, let’s handle this new charge off you have created.
They don’t care about you, me or anyone else in America. They have their eyes on China. They have raped the country, and stolen our worth, and now must move on to greener pastures.
Our good credit is also ruined by “new banking policies.” Hubby’s job has been cut by 2/3 by them and Cuomo’s new FHA policies. I am SO thankful that I am still working. Praise the Good Lord.
Nothing’s happening to my credit cards. I pay them in full every month, and the balance at any given time is a small fraction of my credit line.
My limits are the same as they were two years ago, including my Amex. Could there be another reason for their actions, other than just arbitrary meanness?
“My limits are the same as they were two years ago, including my Amex. Could there be another reason for their actions, other than just arbitrary meanness?”
Other than keeping the money? We still have the exact same spending patterns and monthly charges...no new vendors, no new purchases...nothing has changed...the “comfort levels” dropped from 90K to 40K literally overnight...along with a demand for the balance to keep the account active, even though the new payment was not due til 12/4. Up until last week, I could have written exactly what you just did...
Are the cards in your name/SSN or those of the business? I know my business cards have had their limits cut in half, even though I rarely got above 35% of the credit limit, and would pay it off each month. Now it looks like I regularly push 50-70% of my credit limit, and my business’ credit score took a hit.
At least my Bank of China credit card account is fine, and adds a little more limit each month!
Never fear: Obama will stick it to those greedy bastards.
I have not commented on these posts yet, but in truth nothing has happened to mine, either. But I started my business small and part time thirteen years ago on a cash basis, and only have a 5% credit utilization rate, so it is not like I have a lot of employees or any fast expansion plans anyway. I am one weevil in their silo, and pretty invisible I guess.
We will see what happens in the ensuing months as their pre-legislation feeding frenzy gets rolling.
I don’t mean to sound cavalier, but, find a need and fill it.
Apparently we needs some reasonable credit card companies right now.
“Now it looks like I regularly push 50-70% of my credit limit, and my business’ credit score took a hit.”
That is where you get nailed...the utilization rate...take a 100,000 limit with 45,000 on it and you look good...drop the limit to 50,000, then adjust the rate...what a racket... F-YOU, pay me...The Bank of Soprano...the local banks and the big ones have all squeezed us...
Maybe it’s a business vs. personal thing. Mine are personal.
I’m hearing about reduced limits, new fees, etc on personal accounts but I haven’t experienced it yet.
Citibank jumped my personal MasterCard rate to 29% for no apparent reason. They sent along a notice basically saying I could, “accept the higher rate, or opt out.” Opting out means that they revoke my credit card account at the annual renewal period.
I checked my credit report thinking that I might be getting gigged for something that I did, or perhaps a mistake. Nothing. My credit report is at the top of the scale.
You are witnessing the unintended consequences of stupid liberal impulses on display once again.
“I don’t mean to sound cavalier, but, find a need and fill it.”
Easy to find a lower rate, but with a correspondingly lower limit...the problem is, needing to change from carrying inventory to ordering as needed and pay as you go...increased costs, decreased turnover...loss of business and less personnel needed, smaller size, less leverage, downward spiral...it’s inevitable, but OK if you don’t mind getting smaller and smaller...it’s the “L shaped” recovery...
No, what I mean to say is, start a credit card company.
Easier said than done, I know, but someone could make some money.
“We will see what happens in the ensuing months as their pre-legislation feeding frenzy gets rolling.”
That is what we are doing...getting smaller but staying in business...
Thanks...
In most businesses (even in C Corps) the two are entwined..
We saw this coming months ago, and the new regulations don’t help. But...
>>>>> “If I can not borrow to purchase equipment and supplies..”
Wouldn’t a line of credit or business loan be much better and less costly?
Dude:
It is happening to everyone. If you are a good guy, they are imposing new fees and reducing limits which means your credit, based on FICO is going to take a dump.
It is one giant scam, to screw you. I wouldn’t normally say that but I have friends who are getting mighty irritated and they have almost no debt.
Drive fancy cars and have fancy jewelry? Sure, but they paid cash for them and have a mortgage, that here in California, most people are paying for an apartment. Their house is in a very desireable gated community, one of the top golf courses in California and the Nation.
Their credit card comnpanies just gave them the option of paying some massive fees just to have the card and there are some other strings attached to them.
Bottom line? They tossed every card they rarely use, kept two different cards for large emergencies and have moved to ATM/Debit cards for purchases.
Their thinking is “Screw me? No, screw you!”. “I got money and was paying these things off every month anyway”.
“No, what I mean to say is, start a credit card company.”
Yeah...Progressive has insurance...how about Conservative Bank of Business? Got a couple billion dollars? ;^)
Five things you shouldn’t put on a credit card
http://www.kcbd.com/global/story.asp?s=11481428
I didn't use the card, but they haven't closed the account, don't know why. Another BofA card had its limit cut by about 30 percent. Since I don't use or need these cards, it makes no difference to me, but it does lend credibility to the stories I'm hearing on the news and in the neighborhood.
“Wouldn’t a line of credit or business loan be much better and less costly?”
AMEX has no cost if you pay it off each month...which we did...but if they usually allow you to charge a rolling average of 90K and then drop it to 45K, the pain is the adjustment to what you can do with the changed limit...the reduction in working capital...some of the bank cards were right near what you can do at a bank, anyway, until they went up...try getting a decent sized loan lately? The banks are sitting on their money...or buying gold...we have rolling lines of credit, too, but there are always things you need to pick up...not anymore, though...we are heading into our shell...
Citibank jumped my personal MasterCard rate to 29% for no apparent reason.
Mostly use AMEX.
“Five things you shouldn’t put on a credit card...”
They left out “Payment to Your Congressman”
Interesting link. We put everything, including income taxes and Dollar Store purchases on credit cards, or at least an Amex (due in full each month). I wonder if our behavior was seen as risky, resulting in BofA possibly closing an account and slashing the credit limit on another?
We’re such fools.
The banks are borrowing money at the Fed window for nearly nothing and lending it to you at rates they determine.
Nuts, isn’t it?
I have excellent credit and so does my business, we HAD several AMEX business accounts that we used to buy supplies and materials each month. We paid all of them in full except for one called a Business Line of Credit that is much like a home loan we used to rehab a rental property. That payment is made monthly and well above the minimum (usually at least double)
When the stimulus plan started and the banks were bailed out all of the sudden AMEX cut all our lines of credit drastically. On one I had a 50,000 dollar limit, they cut it to 500 dollars. all the rest were cut by that much or more.
The only reason given is that my "credit profile" matched others who were "at risk".
Our monthly supplies and materials bill exceeds 30,000.00 monthly and they shut off our credit lines for no reason and without warning. We I finally talked to a supervisor (after weeks of trying) he admitted it was to do with new government regulations they had to follow.
Understand we had been dealing with AMEX for 25 years and not a single late payment.
We are done with them forever. We went to a new payment system after we negotiated discounts for immediate payments via direct transfers.(A few clicks of the mouse).
The only reason we started using cards was because our suppliers offered discounts and the card companies gave perks. (awards programs, cashback, etc.)
My credit score is way north of 800. Today I received a letter from Citi notifying me of a rate change to 21.99 apr. Good-bye Citi.
Funny that this thread popped up today. It must be because Amex sent out a LOT of poison pen letters today. I was told today via snail mail that my Amex Centurion card rate was going to 24% today because my last payment was ONE day late(after being returned by the postmaster for having transposed the last two digits of the payment center). One payment and bam....24% Now my next step is to write to Amex(being done as I write this) to ask them one question. I am a 30 year Amex cardholder and regularly charge between $150k to $175k from my business each and every year, so are you willing to lose me as a customer for a one day late payment? If they don’t reverse their letter , it is sayonara Amex.
“Nuts, isn’t it?”
Yep. I’m out...downsize and spend less...good luck to the economy...
Wean yourself from AMEX and do try to avoid SBA loans, if at all possible. You haven’t mentioned the nature of your business, but can you not utilize vendor financing at least for large expenditure needs? Trade group purchasing sources normally offer financing alternatives. You should get favorable rates if you’ve been in business a while and it sounds like you have been.
I think it is interesting that they are watching where and how the credit is spent...not on the payment history.
So if you’re using your card at Macy’s one month and Walmart the next or a quick trip to the Dollar Store...they change your rate?
You might enjoy reading this.
Check the posting date, and the final paragraph.
Cheers!
Actually I was really thinking about sending them a bounced check from my IRS account.
“I am a 30 year Amex cardholder and regularly charge between $150k to $175k from my business each and every year, so are you willing to lose me as a customer for a one day late payment?”
We were putting about 75-90K per month through them...and they just didn’t care...talked to the Plum Card, Gold Card, Platinum Card and Green Card desks...called the Preferred Card Holder line...nothing...they don’t care...good luck...we got a BS letter from the new “banking” arm but, I think not...we are going smaller and switching to cash...and it will suck, but I will NOT deal with these goons...I can’t imagine what it would be like to call a customer and say they had to start prepaying for product or I wouldn’t ship, after 20+ years of perfect payments...
Cheers!
Seems unfair, doesn't it? My wife and I have lowbrow habits, no doubt about it. But if the cc companies are really doing this, it's only a matter of time before somebody sues them for discrimination because the companies have determined they're patronizing Black stores. Ha!
I am done with credit. After I pay off my mess, I will never borrow again.
Ever.
“Wean yourself from AMEX and do try to avoid SBA loans, if at all possible. You haven’t mentioned the nature of your business, but can you not utilize vendor financing at least for large expenditure needs? Trade group purchasing sources normally offer financing alternatives. You should get favorable rates if you’ve been in business a while and it sounds like you have been.”
Yes, thanks...won’t go near the gubmint...not enough there anyway, for the hoops you need to jump through...we are going to a (mostly) cash basis with some painful adjustment to stock limits, etc. and a fairly good line with a smaller local bank...it is the cap that is stressing us...we ran so much of the operating and purchasing through AMEX and paid off the monthly bills, so we were nearly headed that way anyhow...this was the push...I think it will be OK once we get past the discouragement of lighter warehouse and less availability...and sales rep anger (and probable jumped ships) at longer lead times and book to bill ratios out of whack...just a real bill buster...not upside down yet, though ;^)
“Actually I was really thinking about sending them a bounced check from my IRS account.”
Wicked funny, as my Boston friends would say...
A good approach to personal finances but you will always need access to credit when you’re operating a business.
If you have lowbrow habits and always shop at dollar stores that won’t set off any flags. If you go to casinos and spend $20k/month and pay it off each month that won’t set off a flag either. It’s the people who suddenly go from the casino to the dollar store that raise the red flags.
Calls for a "public option" in my estimation.
“We were putting about 75-90K per month through them...and they just didn’t care...talked to the Plum Card, Gold Card, Platinum Card and Green Card desks...called the Preferred Card Holder line...nothing...they don’t care...good luck...we got a BS letter from the new “banking” arm but, I think not...we are going smaller and switching to cash...and it will suck, but I will NOT deal with these goons...I can’t imagine what it would be like to call a customer and say they had to start prepaying for product or I wouldn’t ship, after 20+ years of perfect payments”
Well thanks for the heads up! I guess it is going to be Hasta la Pasta Amex.
Luckily with the TARP funds we kept these bastids in business ... ;-(
i just got the same notice. I can’t believe 29.9%.
That’s insane
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