American Express Just Lowered My Credit Limit

[AmericanRobster]

Wonder when the Goverment will step in and tell these credit card companies to reduce thier overinflated interest rates?

[AintSkeered]

http://www.theonion.com/content/node/32244

[Bigscrb15]

760. Wow. Less than 10,000 people in America have a beacon score that high. Congrats.

There is WAY more than 10,000 people with a 760 beacon... Also, beacons don't mean everything when it comes to getting a loan. I have about 50% or more of 720+ beacons get declined because of other issues such ad D to I ratios and the such.

[foreman1]

I havent had an issue with Amex yet , I use it almost exclusively.
My Chase cards all went from an approx 8% rate to 17% , been with them since approximately 1990 .
Never carried a balance on them , always paid in full and never late.
Go figure.

[Anoriginal]

1,000,000 not 10,000 and it's 0ver 750 and not 700. Typo on my part. This was in a report I read about three weeks ago in US News and World Report. This was down from over 4,000,000 five years ago. Pretty sad state of things.

And the beacon score is a huge deal. Every mortgage lender, automotive lender credit card company and insurance company rates you based upon your beacon score. Agreed that it's only one thing that's looked at. However, it is usually the first thing looked at and, if it doesn't pass muster....it goes no further.

Right now, with lending as tight as it is, you better have a 700 plus score to get a decent rate. Otherwise, you are paying through the nose. We're seeing it every day in the real estate department of our firm.

AMEX is a rip off. Membership definitely does not have its privileges. 

[AintSkeered]

Pucker up again boys! Bank of America is raising their transaction fees from 3 to 4%, in appreciation for taxpayers bailing them out. How else do you expect them to pay back their "loan"? You say you don't take cash advances or do balance transfers, anyways? You still get the shaft everytime you use your credit card because merchants will be paying Bank of America more and passing that on to you. Gotta love all those bank jobs you're saving, huh?

[Anoriginal]

Yeah, the feds are after them to "bolster their capital". What does this mean to you and I?

It means it's going to be EVEN MORE difficult to qualify for a loan. The rates you pay on loans will go up. Transaction fees and charges will go up. Collection efforts will increase and the Bank will be less willing to cut you any slack or any deals when trying to reach a payoff on any deliquent account.

[VForcedave]

An explanation of the lowering of Credit Card Limits is that the credit card companies re-sell your debt to other investment companies and they make a percentage of the interest profit. These companies stopped buying the debt from Amex, MC etc so the CC companies are lowering their risk. 

 

[AintSkeered]

CC companies can step-up collection their efforts all they want, but, most defaulters can't pay their debts, regardless. So, at the end of the day, the collection vultures will merely be holding uncollectable judgments on less than 3% of all defaulters. It costs very little to file a lawsuit and get an uncontested judgment, but, with the current economy the general public is getting better-educated as to how to respond to those cases before, during and after any legal action and how to protect assets from potential judgments. There are ads all over the TV, Google, etc.. No one should allow themselves to be shackled in credit card debt for years, at the expense of their own family's future. The time to eliminate your debt is today, when the economy is bad! Then, in a couple of years, lending terms will improve and you'll have already been on your way to improving your credit history, instead of still being in debt.

[AmericanRobster]

The time to eliminate your debt is today, when the economy is bad! Then, in a couple of years, lending terms will improve and you'll have already been on your way to improving your credit history, instead of still being in debt.

Good point. My credit card debt is almost paid off! I can't wait to put all that money in the bank!

[Anoriginal]

Judgments (judgment liens) are good in Florida for 20 years and then renewable for another 20. In the meantime, they bear interest at the legal rate. Currently, that is 8%. Last year it was 11%. Not a bad deal as far as money goes. Especially when you figure in what banks are paying on savings and CD's. Also, any moeny spent on collection efforts is recoverable under the judgment.

Someone who knows what they're doing with judgment liens can actually make quite a bit of money collecting them. That's why there's such a prolific third party debt collection market in the US today.

[AintSkeered]

Thanks for the debate. I don't intend to get into any pissing contest on this issue. But, there's so much a debtor can do to eliminate debt way before any judgment or lien arrives. Third-party collectors make their money by taking advantage of the legal ignorance of debtors. If you're in debt which you don't feel you can ever totally repay with your current income/career, contact one of those debt elimination(not consolidation) organizations and follow their advice to the T.

[Anoriginal]

Better yet, file for reorganization. Most of those debt elimination plans fail. Something like 80% is the number I've heard. Also, with reorganization, you can usually start to rebuild your credit score within five years (when the discharge is final).

[buythisatvstuff]

Yeah, the feds are after them to "bolster their capital". What does this mean to you and I?

It means it's going to be EVEN MORE difficult to qualify for a loan. The rates you pay on loans will go up. Transaction fees and charges will go up. Collection efforts will increase and the Bank will be less willing to cut you any slack or any deals when trying to reach a payoff on any deliquent account.

Ironic since it's many of the banks and lending institutions that got us into this mess by lowering their standards and raking it in while blowing up the housing bubble, now those of us that borrowed and spent within our limits are going to get screwed because  the people that should never have gotten loans or credit defaulted since it was free money with 100% loans and government subsidies to get them into theses not deserved loans. In short the banks lent to those that didn't deserve it, and now those that remain credit worthy will get to pay for it. That spread the wealth crap only sounds good if you're one of those that don't/can't /or won't earn your share.

[AintSkeered]

Yes, 80% of debt consolidation plans inevitably fail. But, that's not the same as the debt elimination plans. The banks don't want you to believe bankruptcy's the only way, but, that'll stay on your credit report for 10 years(vs. a default or a settlement).

[Anoriginal]

Consolidation is simply one tool in elimination. Most (actually the number is 75%, not 80%...my bad) debt elimination plans fail. Also, the vast majority of them have you stop paying and wait until your debts are sold several times to the end collection/third party debt agency. Then, they slide in and negotiate a deal to pay off a percentage of the total you owe.

Funny thing is, most people could do this themselves (up front with the primary lender) but are too lazy to do so. Instead, they pay these companies to do it on their behalf. Meanwhile, their credit goes further and further into the toilet. Here's why.

When the primary lender/bank/credit card company sells the debt, it writes off a large portion of that debt. This is reflected as "written off to bad debt" on your credit report. Meanwhile, it also reflects being turned over to a collection agency. (Yeah, I know that's double dipping but, the banks and credit card companies do it all the time) In addition, some of the collection companies continue to report the bad debt/collection efforts to the credit bureaus, despite the fact it's already considered bad debt/written off.

What this does to your credit is unreal. Especially if you have numerous debts you are turning over to one of those debt elimination companies. The cumulative impact of these credit dents is amazing. Whereas, had you either dealt with it up front or, filed for reorganization, you'd be money ahead.

If you deal with it up front, you'll eventually reach a point where the companies will deal with you and accept a lower payment or lesser amount in lump. Granted, their willingness to do this depends on a lot of factors, including how much you owe, who the company is, history of payment, etc. However, I've hardly ever come across a company that wouldn't deal in the situations I've handled for people in the past.

If you are able to reach a deal, the arrangement will essentially show up as a "paid/paying under plan" on your credit. This is far less damaging than defaulting, having it written off and then sold over and over again. Remember, each time it's sold, they check your credit report which is another ding to you.

Under a reorganization, you enter into a plan (usually five years) to pay off a percentage of your total debt in one lump sum payment. After five years, you're done and moving forward. Yes, it stays on your credit report for years. However, the cumulative impact is usually less over time than multiple occurrences under the debt elimination scams. In addition, there are specific programs in place with most lenders for people who've experienced reorganization and received a discharge after payment under their plan. In otherwords, it's pretty easy to reestablish credit.

I'm not saying all debt elimination programs are scams. However, with a 75% failure rate and the drastic damage (even more long term than reorganization) to your credit, there are far better alternatives out there.

[Bigscrb15]

1,000,000 not 10,000 and it's 0ver 750 and not 700. Typo on my part. This was in a report I read about three weeks ago in US News and World Report. This was down from over 4,000,000 five years ago. Pretty sad state of things.

And the beacon score is a huge deal. Every mortgage lender, automotive lender credit card company and insurance company rates you based upon your beacon score. Agreed that it's only one thing that's looked at. However, it is usually the first thing looked at and, if it doesn't pass muster....it goes no further.

Right now, with lending as tight as it is, you better have a 700 plus score to get a decent rate. Otherwise, you are paying through the nose. We're seeing it every day in the real estate department of our firm.

AMEX is a rip off. Membership definitely does not have its privileges. 

I am bringing this back from the Grave to say you can't change your screen name... I then end up posting something and trying to correct you when you obviously know way more about it than me lol....

[AmericanRobster]

I haven't been on ATV FL in so long I decided to catch up and see whats going on and I couldn't believe that I found this thread on the second page 

UPDATE!!!!

As of Dec 23, 2009 I was let go by my employer and paid off all of my credit card debt through persistance and hard work. I have since gotten rid of American Express and the Home Depot credit card. I am now going to school full time and soon working a part time job to bridge the gaps while in school.