Furious at Credit Card Company

[mintblossom]

Yesterday, I called my credit card company. Fia Card Services owned by Bank of America. I thought it would be a good idea to see if I could get a credit line increase. (Read too many articles about how banks are relaxing lending.) I asked the customer service representative, "will requesting an increase possibly decrease or affect my existing credit line?" He told me it would be "very rare." I thought I had nothing to lose, the worst they could do is decline it, right?

 

Wrong. I told them that I receive unemployment benefits. As soon as I told them this, they told me they were going to lower my credit line by $5,000. I am absolutely furious at this. I have been loyal to the credit card - it was one of my favorites. I have NO debt. I have NEVER borrowed cash from them. I have NEVER been late on any payments anywhere EVER. I have an EXCELLENT credit score. I always pay in full every month. I have no loans, debts anywhere. I have a very low credit-utilization ratio. Plus I live at home so no rent/housing payment. But despite this, they lowered it.

 

I talked to the supervisor who was completely unsympathetic and unapologetic - she said she was the top supervisor and if I wanted to go above her - well, she transferred me to a voicemail. They have horrible horrible customer service - they pretty much lied to me.

 

Now, I am a responsible person, no late bills and sound financial history. But imagine, if I were in a tough economic spot, this would have put me right over the edge. What if I had really needed the credit?

 

At this point, I don't think it will hurt me....except that my pride and dignity feel trampled. My belief in honesty is shaken as well. Millions of Americans are unemployed, is that something really to feel so bad about? I became unemployed through no fault of my own. Ugh. Rotten credit card company. If there had been a real flag in my financial history that signaled the need for this, I would understand. But I feel it is so undeserved and unjust, and they did not care one iota.

 

If someone has a better credit card recommendation from a good company, please let me know. As soon as I find a better deal, I will jump ship and never look back. I want a company that will value my responsibility and loyalty. I feel there is no longer any point trying to build a loyal history with this one.

[Mercurial Girl]

Being unemployed doesn't exactly make you an eligible candidate for increased or new credit. Surely you can understand why.

 

You can sure TRY getting credit with a different bank, but too many inquiries will hurt your credit score and I doubt anyone would approve you right now.

 

Sure you don't have any debt, but you also don't have a job so that you can pay back the debt you're trying to accrue on your credit line.

[chitown9]

No other company to recommend you to, but I can definitely understand your anger..chi

[mintblossom]

Debt? I'm not trying to accrue debt. I just thought it would be good to have more credit as insurance. I don't even have any credit card debt.

 

Do unemployment benefits not count as money? Does a solid payment history count as nothing? The guy even told me my payment history has been excellent. I also have high savings. They choose to consider only one point of my financial picture. Not the whole.

 

I expected maybe a decline to increase credit. I didn't expect a decrease especially when the rep said it was "very rare". Never had that happen before.

 

Nevertheless, I will find a better job position and I will make sure to get a card from a better company. This isn't the only card I have but it was my favorite. I definitely need a new favorite.

 

I also checked the web - lots of complaints about them. I didn't realize why before 'cuz I never had a problem with them before. But now I see it.

[Ariel85]

I'm sure you can understand why a bank doesn't want to extend more credit to someone without a job, right?

 

And no, unemployment benefits are not considered income, nor are they considered a good credit risk. You *have* to see this.

[Mercurial Girl]

You're planning on accruing debt in the event that your unemployment benefits run out and you don't find a new job before then right? What did you need more credit for exactly? If they decreased your limit by FIVE THOUSAND dollars, you had more than enough "insurance" to begin with. Asking for more set off alarm bells I'm sure.

 

Unemployment benefits count as money but they don't count as a job. I would never, EVER expect to get more or new credit if I didn't have a stable job.

 

I wouldn't be furious at any person or business for denying to lend me money in unemployment, they have no obligation whatsoever. On their end it's "hey, could I please increase my available credit from $5,000+ to, say, $10,000? No, I don't have a job, but I DO have unemployment cheques coming in for a few more months, so I might be able to scrape together minimum payments for now, and IF I get a job (there are lots of those out there, riiight?) then I can start paying you back. But if not....oops! default! That's okay though, you can just write it off on income taxes!"

[sadchick83]

Lending on unsecured debt is based on good credit. Once you get passed that hoop it is based on assets and income. Because there is nothing securing the debt, income is weighed heavily. A lender cannot put you in a situation you cannot afford, so once you let them know your income has decreased, your lending situation changed. Unemployment insurance only counts as income if you do something seasonal like a fish, or garden. If it is simply because you are unemployed, it does not count as income.

 

With America defaulting on all sorts of debts, lending guidelines have changed. Do you think it makes sense to lend more to someone who makes less?

 

Maybe a bank would be more comfortable lending against your house...at least there is an asset behind the debt.

[mintblossom]

They should have been upfront and honest in stating that requesting an increase could possibly hurt my existing credit line. They lied about that, which I take offense with.

 

Second, no, I was not planning on accruing debt because I think I can get a job before my benefits run out. And in any circumstance, I would rather borrow from family than from a credit card company which charges sky high interest rates. I would be afraid that I could never get out from something like that. I use credit first than pay it all off, but that's so I can get rewards.

 

I suppose I was naive but I think about my finances very carefully and I've always assumed more credit is better than none. Plus, it's sad to think that unemployment isn't income. I would say it's income. It's not ideal but it will do while I look for a job.

 

I find it ironic that banks will lend to those who are high-risk and cause a whole financial mess and decrease lending on someone who is not risky. It took me time to build up my credit line to what it was, years of patience and good payment history and in a few seconds, a customer service rep can change it just like that.

 

Suffice to say, lesson learned.

[avman]

Yeah I can understand the bank's response here. You let on that you are unemployed and instantly that makes you a risk for default. Naturally they would not increase your credit and because banks have been so burnt by defaults that was all the reason they needed to decrease the credit line. Almost any bank would react in a similar fashion. Being unemployed = high risk.

 

As others have mentioned you may have more luck with a secured loan such as against a home, car, or a certificate of deposit backing the loan.

[avman]

They should have been upfront and honest in stating that requesting an increase could possibly hurt my existing credit line. They lied about that, which I take offense with.

 

Well they told you it would be very rare. It doesn't sound like they lied. Unfortunately you happened to fall into one of those "very rare" situations.

[Ariel85]

They didn't lie to you. If you still had a job and an income, I'm sure it wouldn't have changed things, even if they denied you credit, which, they most likely would have, as people aren't getting more credit these days.

 

I'm quite sure the fine print of the card says that if your income or employment situation changes or decreases, they reserve the right to review or lower your credit line.

 

And if you didn't plan on using the credit line, then why did you ask for it?

 

But no, unemployment benefits are not an income, and it's a little sad that people consider it such.

[mintblossom]

I was trying to boost my credit score by having more credit, though I planned to keep using the same amount as I do now. I plan on buying a car in the next few years so it would make sense to me to increase credit if possible while keeping utilization ratio low and let the score increase by maintaining a good track record.

 

I have more sense of my financial stability and situation than the bank. I resent being labeled a risk. I simply don't see myself that way.

[sadchick83]

Banks are in tricky situations. Suppose you defaulted on your line of credit and the bank took you to court. The judge would ask the bank: So this individual told you they lost their job and you lent them more money???? The bank has a fiduciary duty to lend within guidelines. Someone with unemployment income should be using their money for car insurance, groceries, child care- the essentials. Not servicing newfound debt. Whatever happened to save for something before you buy it?

 

Credit is not something that is "owed" to an individual. It's sad to say, but credit card debt has ruined America. This buy now pay later attitude has terrible ramifications. Maybe take this time to live leanly. And when you get a job, use the money you make to save and not service debt that accumulated while you were unemployed.

 

Oh and by the way, having more (excessive) credit lowers your credit score, even if it is not being used. Why not save up for that car??

[mintblossom]

I don't think credit card debt has ruined America. I think the decrease in wages, the widening inequality between the richest and poorest, and the decimating of the middle class through specific government policies is what's ruining America.

 

Being able to have credit has afforded many ordinary people the opportunity to buy houses, cars, and to finance a better lifestyle for themselves. Very few people have $400,000 in cash to purchase a home. It affords those who can pay it back the opportunity to buy ahead and to pay it down. Lending on credit if used properly can do great things. It allows people to afford education for one. Credit has also created tremendous profit in the trillions for banks.

 

As always the devil is in the details. But I think banks are just having knee-jerk reactions now. After losing so much by irresponsibly lending to sub-prime mortgage holders, they now react extremely in the opposite direction.

[Batya33]

My guess is that is in the fine print or not so fine of your agreement they say that they can decrease your credit line if your financial circumstances change so I don't think they lied to you.

[Ariel85]

Your credit score won't go up by increasing your credit, if you're not using it and paying it back immediately.

 

And you said your credit score was already excellent, so why try to improve on excellence?

 

I do think the decrease in credit will affect your overall credit score, however. Which is unfortunate, since this is the opposite of what you were trying to do!

 

If you really want to be financially responsible, then you wouldn't need a credit card to begin with. Switch to an AMEX, which sounds more in line with your needs, since you don't actually use the credit. This way you'll have an unlimited credit limit.

[mintblossom]

I asked him specifically if asking for an increase could possibly lead to a decrease or hurt my credit line in some way. If he had told me it would be likely, I would not have proceeded. So yes, I feel tricked. If I cannot reasonably rely on the answer that I ask of a representative, than what trust and belief can I have in them?

[Ariel85]

Mint - c'mon. You can't really think you deserve more credit when you don't have a job. That's just silly.

[renaissancewoman101]

Mint - c'mon. You can't really think you deserve more credit when you don't have a job. That's just silly.

 

But she's been making payments on time, and hopefully paying off the balance or more than minimum. I think that is a "+" for credit score and in the eyes of the credit card company.

[Ariel85]

But she's been making payments on time, and hopefully paying off the balance or more than minimum. I think that is a "+" for credit score and in the eyes of the credit card company.

 

Which is lovely, but if you don't have a job, you cannot realistically expect more credit. In fact, you can't realistically expect ANY credit.

[mintblossom]

Your credit score won't go up by increasing your credit, if you're not using it and paying it back immediately.

 

And you said your credit score was already excellent, so why try to improve on excellence?

 

I do think the decrease in credit will affect your overall credit score, however. Which is unfortunate, since this is the opposite of what you were trying to do!

 

If you really want to be financially responsible, then you wouldn't need a credit card to begin with. Switch to an AMEX, which sounds more in line with your needs, since you don't actually use the credit. This way you'll have an unlimited credit limit.

 

I thought about AMEX, but very few places take AMEX right? I am also thinking about switching from my regular bank to a credit union since I have heard credit unions are better.

 

I think I have bag lady fears. No matter how good my situation is (and this is true of even when I was working), I am always afraid of financial insecurity. I am always looking to make it better, always looking to improve, always looking for cushion/insurance against any possible/potential financial setbacks. Come to think of it, I suppose that is how the bank is thinking too.

 

But yeah, my bag lady fears are probably a bigger issue within me.

 

No, I didn't expect more credit. I agree that wouldn't be reasonable. I expected it would probably be declined but I wanted to test it out and see what would happen. I do admit I do that sometimes. But did I expect a decrease? No - because there has been no sign or indication of any risk. I have not racked up any debt, have not missed a payment, I just paid off $1600 in full, have not borrowed cash - none of that, so the decrease was a shock.

[Mercurial Girl]

I asked him specifically if asking for an increase could possibly lead to a decrease or hurt my credit line in some way. If he had told me it would be likely, I would not have proceeded. So yes, I feel tricked. If I cannot reasonably rely on the answer that I ask of a representative, than what trust and belief can I have in them?

 

To be honest I'm not sure how common that is. I have multiple (read: too many) credit lines and am at 100% of my limit in some cases (don't ever let yourself go there - it really sucks) and each creditor was aware of my lack of employment but none decreased my limit - though I know they have the right to at any time.

 

So maybe it is in fact rare, but you asking for an increase at this point in time would make any lender nervous and second guess themselves. You may not have been fooled but you were enough of a risk that you fall into the "rarely" category. He didn't say "never". If you make $0, and have more than $5000 available and still want more, you are high risk and not worth the potential ROI.

[Ariel85]

Meh - I don't think you need to worry about being a bag lady. I think getting too used to unemployment can set you on that path, though. If I were you, I would do all I could to find a job, even if it paid less than unemployment, because taking government assistance isn't going to help you out in the long run in any scenario - not when it comes to your credit or finding future work. If you can maintain your financial independence, and always feel that you can make it on your own without help, then you won't need to worry about the bag lady thing.

[OptomisticGirl]

I have to agree with everyone - the guy didn't lie to you. If he had said "No, it will NOT hurt you or decrease your credit limit' then yes, he would have lied. He said very rarely. As Avman said, you fell into that very rarely category. If I'm not mistaken though increasing the credit limit in itself is not going to bolster your credit rating - using it and then paying it off will. While you see it as such, the bank is looking at the fact you are living off unemployment checks and want to raise it (and therefore the only way to increase your score would be to use more and pay off)... but if you only have x amount of money coming in, it makes them jumpy.

[FathomFear]

I was trying to boost my credit score by having more credit, though I planned to keep using the same amount as I do now. I plan on buying a car in the next few years so it would make sense to me to increase credit if possible while keeping utilization ratio low and let the score increase by maintaining a good track record.

 

While it is true that getting a higher limit would further decrease your debt/credit ratio, the act of asking for an increase is usually a red "flag" that's tracked by credit bureaus. It's a sign that basically says "This person is asking for more credit, which means he/she might be planning on using it in the near future".

 

I have more sense of my financial stability and situation than the bank. I resent being labeled a risk. I simply don't see myself that way.

 

At the end of the day you must appreciate, though, that credit bureaus or credit card companies do not have the luxury of getting to know each person intimately. Each one of us is only a set of cold facts. If their computer model tells them that people in your situation are an increased risk--even if clearly not all of them are--you will be grouped with them. For every unemployed person with a spotless payment history who asks for more credit and doesn't pose a problem, there might be five people with the same attributes who do. That's all they see. It's just not about you as an individual. It's about the client segment you happened to fall into. If anything else, you should feel bitter towards all the unemployed people who do ask for more credit only to default on it later. Those are the ones who ultimately lead to your credit being decreased.