BoA to close credit cards for approximately 60% of customers?

[Jay]

Re: BoA to close credit cards for approximately 60% of customers?

FICO is a separate organization from the bank. Their algorithm is secret in specifics but is known in general. Part of a FICO score is determined by the ratio of credit used to credit available, and changes there whether plus or minus.

That's why it isn't a good idea to close an account in some cases.

BTW, they will be granting much less credit in the future, except to people who have a verified source of stable income. That's how it used to be. Perhaps nobody remembers but when you wanted a credit card until the late 1980s or early 1990s, you needed to furnish an employment reference and they would actually check!

Wow, what an idea!

I just bought a tube pre-amp from amazon and got 30 bucks for opening a visa account with them. I threw a bunch of numbers on an online form and "poof" I had a new credit card. The last bastion still stands. :rolleyes:

[Guinnesstime]

Re: BoA to close credit cards for approximately 60% of customers?

i bet there's an insider who will some day spill the beans... show the instructions to NOT train customers and use profiles that say hispanics are statistically unwise on credit but will kill themselves trying to pay off whatever you load then down with a stupid high rates.

got such a smoking gun doc? send it over!

They had portfolios that focused on certain "markets" i.e. hispanics. If there was a smoking gun a peon like me wasnt privy to it.

You have to be a fool to let someone own you with debt, but many CC companies have such "slaves".

[metalman]

Re: BoA to close credit cards for approximately 60% of customers?

Hey guys...awesome site.... first post.

I used to work for one of the biggest CC companies. I always felt like they shouldn't have given CC to 60% of the cardholders in most of their portfolios. I once told some higher ups we should not give CC to applicants until they take some sort of CC or financial education class or test. I felt that the company needed to educate people so they later understood why we came calling to collect with a vig the mafia would be proud of. Of course I was laughed at for being young and dumb. I am still young, but not dumb enough to stick with those loan sharks.

i bet there's an insider who will some day spill the beans... show the instructions to NOT train customers and use profiles that say hispanics are statistically unwise on credit but will kill themselves trying to pay off whatever you load then down with a stupid high rates.

got such a smoking gun doc? send it over!

[Guinnesstime]

Re: BoA to close credit cards for approximately 60% of customers?

Hey guys...awesome site.... first post.

I used to work for one of the biggest CC companies. I always felt like they shouldn't have given CC to 60% of the cardholders in most of their portfolios. I once told some higher ups we should not give CC to applicants until they take some sort of CC or financial education class or test. I felt that the company needed to educate people so they later understood why we came calling to collect with a vig the mafia would be proud of. Of course I was laughed at for being young and dumb. I am still young, but not dumb enough to stick with those loan sharks.

[grapejelly]

Re: BoA to close credit cards for approximately 60% of customers?

Gah The whole credit scoring mechanism is a black box of smoke and mirrors anyway, and then they pull stunts like that.

Of course, we've discussed on iTulip before that as more and more people with "good" FICO scores default on their mortgages, credit cards, etc., the reliability of those scores will come into question. So give it some time, and maybe you won't care what they say your score is.

FICO is a separate organization from the bank. Their algorithm is secret in specifics but is known in general. Part of a FICO score is determined by the ratio of credit used to credit available, and changes there whether plus or minus.

That's why it isn't a good idea to close an account in some cases.

BTW, they will be granting much less credit in the future, except to people who have a verified source of stable income. That's how it used to be. Perhaps nobody remembers but when you wanted a credit card until the late 1980s or early 1990s, you needed to furnish an employment reference and they would actually check!

Wow, what an idea!

[zoog]

Re: BoA to close credit cards for approximately 60% of customers?

I had a 20K line of revolving credit with Citibank, obtained a couple of years ago and never used. I would take out $1000 now and then and then put it back in, just to keep the account ticking over.

I got a two line letter a couple of weeks ago summarily advising me it had been closed, citing some obscure opt out clause on Citi's behalf in the original contract. They just shut it down because they are pulling in their horns. Did not have anything to do with me.

I also subscribe to a service that monitors my credit rating. Today two weeks after Citi's credit line cancellation, I see that my credit rating has taken a "ding" of 13 points, purely because of the "retracted" line of credit. I have always loathed Citibank. Today? I'm seeing red. :mad:

Gah The whole credit scoring mechanism is a black box of smoke and mirrors anyway, and then they pull stunts like that.

Of course, we've discussed on iTulip before that as more and more people with "good" FICO scores default on their mortgages, credit cards, etc., the reliability of those scores will come into question. So give it some time, and maybe you won't care what they say your score is.

Re: BoA to close credit cards for approximately 60% of customers?

I had a 20K line of revolving credit with Citibank, obtained a couple of years ago and never used. I would take out $1000 now and then and then put it back in, just to keep the account ticking over.

I got a two line letter a couple of weeks ago summarily advising me it had been closed, citing some obscure opt out clause on Citi's behalf in the original contract. They just shut it down because they are pulling in their horns. Did not have anything to do with me.

I also subscribe to a service that monitors my credit rating. Today two weeks after Citi's credit line cancellation, I see that my credit rating has taken a "ding" of 13 points, purely because of the "retracted" line of credit. I have always loathed Citibank. Today? I'm seeing red. :mad:

[Rajiv]

Re: BoA to close credit cards for approximately 60% of customers?

Comes from moving a post started in the "rumors" section to the "iTulip News with AntiSpin" section -- add to it the magic mix of bailout failure, and google -- and your readership suddenly jumps!

[Thailandnotes]

Re: BoA to close credit cards for approximately 60% of customers?

Is the number of views for this thread for real?

33,777 views?

[phirang]

Re: BoA to close credit cards for approximately 60% of customers?

New York Times - June 21, 2008

Banks Trimming Limits for Many on Credit Cards



edit: Ms. Whitney was referring to this: May 2, 2008 Federal Reserve proposes rules to prohibit unfair practices regarding credit cards and overdraft services

BoA just raised my limits on my cc...

[Slimprofits]

Re: BoA to close credit cards for approximately 60% of customers?

New York Times - June 21, 2008

Banks Trimming Limits for Many on Credit Cards

Banks that issue cards like Visa and MasterCard, as well as the American Express Company, are cutting the limits for customers who have run up big debts, live in areas that have been hit hard by the housing crisis or work for themselves in troubled industries.

[..]

Credit card lenders are also culling their accounts ahead of new rules that are intended to benefit consumers but could limit the profits on customers deemed bigger risks.

[..]

Washington Mutual cut back the total credit lines available to its cardholders by nearly 10 percent in the first quarter of the year, according to an analysis of bank regulatory data. HSBC Holdings, Target and Wells Fargo each trimmed their credit card lines by about 3 percent.

Among those four lenders, that amounts to a reduction of about $15 billion in three months. Over all, the amount of available credit for the industry appears to be about flat, with the three biggest issuers — Bank of America, JPMorgan Chase and Citigroup — slightly increasing their overall credit lines. But even they are trying to rein in risky individual accounts.

[..]

American Express is reducing credit lines for customers holding subprime mortgages and small-business customers in industries tied to the real estate market. And Chase Card Services, the consumer arm of JPMorgan, is taking similar action on distressed borrowers, especially in places like California, Arizona and Florida, where home prices have declined sharply.

Washington Mutual, HSBC, Target and Wells Fargo all acknowledged they were pulling in lines of credit as part of broader strategy of reducing risk.
None of those lenders, as a matter of policy, would comment on individual customer accounts.

[..]

Meredith Whitney, an Oppenheimer banking analyst, said the impact of the recent regulatory proposals on lender profits could be so severe that she expected the industry to pull back $2 trillion in outstanding credit lines by 2010. That would be a 45 percent reduction in credit currently available to consumers.

edit: Ms. Whitney was referring to this: May 2, 2008 Federal Reserve proposes rules to prohibit unfair practices regarding credit cards and overdraft services

[Jim Nickerson]

Re: BoA to close credit cards for approximately 60% of customers?

my read is she says she 'ran' in july. you're saying she's stupid for that?

running before a 1000 point decline doesn't strike me as stupid. or am i missing something in your comment?

speaking of day traders, where's jim?

wrong, never have been a day-trader, Never!

I'm in cash US$ 75%, and have been since 9/17/2008

[Slimprofits]

Re: BoA to close credit cards for approximately 60% of customers?

Many Lenders Lower Credit-Card Limits

"Most banks are cutting their credit limits," says Carol Kaplan, spokeswoman for the American Bankers Association. "They're doing it to everyone."

WSJ - 09/30/08

Ok, but I don't have a great FICO score and the small limit on one of the credit cards that I keep around doubled as of today.

[metalman]

Re: BoA to close credit cards for approximately 60% of customers?

Stupid is as stupid does little girl, but i am running to where i am not sure

my read is she says she 'ran' in july. you're saying she's stupid for that?

running before a 1000 point decline doesn't strike me as stupid. or am i missing something in your comment?

speaking of day traders, where's jim?

[rabot10]

Re: BoA to close credit cards for approximately 60% of customers?

Fed Funds spread signals crash!!!

RUN FORREST, RUN!!!!

Glad I did. iTulip never talks about crashes, so when they do...

Stupid is as stupid does little girl, but i am running to where i am not sure