Boa: Credit Cards Closed

[Sapiens]

http://www.ireport.com/docs/DOC-97300

I work in Credit Department at BoA (Senior Level Credit Analysist Boa Bldg 3rd fl, Char, NC)..We just received memo indicating that all BoA credit cards are being closed as of 10/1. Credit score and income do not nmatter,,all accounts are closed as of 10/1. I'm sure this will be on Drudge within 2 days

Comments:

This is true, but not as bad as he/she says. We are closing accounts, but only ones with credit scores under 750. We will reopen cards within a year as long as crisis lessens.

J.mcmanus / VP Credit Dept BOA

[metalman]

Re: Boa: Credit Cards Closed

http://www.ireport.com/docs/DOC-97300

yeh "only ones with credit scores under 750" no big deal... only cuts 60% of their customers off at the knees. wonder if the under 750 scorers are a growing or shrinking group?

FICO Range (percent of the population)
300-499 (2%)
500-549 (5%)
550-599 (8%)
600-649 (12%)
650-699 (15%)
700-749 (18%)
750-799 (27%)
800-850 (13%)

http://ficoforums.myfico.com/fico/bo...id=165195#M839

[BrianL]

Re: Boa: Credit Cards Closed

Well, banks have been lowering credit lines (http://money.cnn.com/2008/09/25/pf/c...ion=2008092612). This could simply be the next step.

At the same time, the timeline seems too short. Shutting off credit with 2-3 days notice could be devastating to a bunch of their customers. I'm leaning towards the ireport story being a fabrication.

Many probably have multiple credit lines, so this may not be a huge deal. I could see anyone exclusively at BoA immediately attempting to open accounts elsewhere. If that happens in mass, I'd imagine other banks would follow suit to some degree to protect themselves.

[The Outback Oracle]

Re: Boa: Credit Cards Closed

Brian...I imagine if they are maxed out on all their Credit Cards it will be something of a problem! Still as you say the macro effect may not be large unless the others are following suit.....still the old song springs to mind
"Chip! Chip! Chippin away"

[grapejelly]

Re: Boa: Credit Cards Closed

I don't believe this. The Fed is going to liquify banks and they aren't going to shut off this (still) profitable source of interest income.

[Slimprofits]

Re: Boa: Credit Cards Closed

CNNMoney.com - 09/26/08

After a weekend getaway in New York City, Joseph Lanza logged onto his Bank of America Visa account and was shocked to see that his line of available credit had been reduced to $1,000 from $3,800.

Because of the recent charges from his trip, his balance was $970, dangerously close to his credit limit. "I had been trying to pay my debt down to improve my FICO score and also my debt-to-credit ratio," said Lanza, 26, who works at an investment firm in New Hampshire.

But despite making timely payments and keeping careful track of each charge, he said, "It feels like I'm running up against a bunch of walls."

Betty Riess, a spokeswoman for Bank of America, said she was unable to address the specifics of Lanza's account, but she did say the bank is "taking a more aggressive look at accounts to control risk, given the current environment."

[Guest]

Re: Boa: Credit Cards Closed

I have had a $20K line of credit with Citibank for the past two years as a contingency fund I never planned to use. I've withdrawn $1000 from it and paid it back on a couple of occasions in order to keep it ticking over.

Last week I got a (very short) summary letter from Citibank informing me the line of credit had been summarily closed, due to some obscure opt out clause in the original contract. I was welcome to telephone them for further explanation if I chose to.

Oh, and I was given precisely zero notice.

[Slimprofits]

Re: Boa: Credit Cards Closed

I have had a $20K line of credit with Citibank for the past two years as a contingency fund I never planned to use. I've withdrawn $1000 from it and paid it back on a couple of occasions in order to keep it ticking over.

Last week I got a (very short) summary letter from Citibank informing me the line of credit had been summarily closed, due to some obscure opt out clause in the original contract. I was welcome to telephone them for further explanation if I chose to.

Oh, and I was given precisely zero notice.

Lukester, thank you for sharing that very personal note.

There are quite a few similar stories being reported in newspapers and on the wires about small business owners, personal accounts and of course HELOC.

[touchring]

Re: Boa: Credit Cards Closed

I have had a $20K line of credit with Citibank for the past two years as a contingency fund I never planned to use. I've withdrawn $1000 from it and paid it back on a couple of occasions in order to keep it ticking over.

Last week I got a (very short) summary letter from Citibank informing me the line of credit had been summarily closed, due to some obscure opt out clause in the original contract. I was welcome to telephone them for further explanation if I chose to.

Oh, and I was given precisely zero notice.

Doesn't mean anything about you. Maybe Citibank is running low on funds to lend out.

[solidgold]

Re: Boa: Credit Cards Closed

A line of credit is not a guarantee of availability. Personal and business lines of credit are being canceled due to the deplorable state of bank balance sheets. The line of credit represents a potential liability to the issuer. The de-leveraging of the banking system is not even close to being over.

I am affraid that we are in for a long hard adjustment period, many years, to get back to financial system stability. Millions of Americans will have to adopt a more modest life style.