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netwirejohn

Need some help - got CLD

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Hey Guys,

 

I'm seeking some help with a situation that I found out about yesterday. I was out shopping yesterday to find out my card was declined. I get home and log on to Bank of America to find out they credit limit decreased my credit card accounts including my business credit card account as well. They lowered the limit just slightly above the balance.

 

So I decided to check my other accounts to see what may have had occurred. It also looks like my Chase account was also lowered from $8000 to $5900, Fulton Bank Visa from $5k to $2k (which is now 1k over the limit) and to also find out my other business credit card from USBank was lowered from 10k to 6800.

 

What is so odd is that both my business credit cards were just credit increased to BOA to $8k from 5$ and USBank to 10k$ from 5k$ about a month ago and they slashed my limits. I've never been late any payments and when I contacted Bank of America about the 3 card accounts they say they saw the decrease but advise me to wait for the letter in the mail for the explanation.

 

I took about a $10k$ hit.

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Are you carrying balances close to the limit on any cards? What is the current utilization on your individual cards?

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I would say there is about 4 cards that are close to the limit.

 

I would say the overall UTI is close to 50%.

 

As follows, Credit Limit (old), Credit Available, Credit Balance, Utilization %

 

Citibank 1 $10,000.00 $2,127.65 $7,872.35 78.72%

Citibank 2 $4,000.00 $3,123.01 $876.99 21.92%

Capital One $5,500.00 $5,500.00 $0.00 0.00%

Barclays MasterCard $6,500.00 $4,744.60 $1,755.40 27.01%

USAA Platinum Visa $12,000.00 $2,510.56 $9,489.44 79.08%

DCU Visa $10,000.00 $10,000.00 $0.00 0.00%

Bank of America - AMEX $5,000.00 $2,500.00 $2,500.00 50.00%

Bank of America - MC $6,000.00 $2,100.00 $3,900.00 65.00%

PayPal MasterCard $9,800.00 $921.00 $8,879.00 90.60%

Chase Hyatt Visa $8,000.00 $1,855.32 $6,144.68 76.81%

Chase Slate $700.00 $700.00 $0.00 0.00%

WNNFB - Macys $1,200.00 $1,200.00 $0.00 0.00%

WNNFB - Bloomingdales $1,500.00 $1,500.00 $0.00 0.00%

Citi - BestBuy $2,500.00 $270.00 $2,230.00 89.20%

GECRB - JCPennys $1,500.00 $1,500.00 $0.00 0.00%

GECRB - Lowes $5,800.00 $5,533.98 $266.02 4.59%

GECRB - Amazon $7,000.00 $5,104.34 $1,895.66 27.08%

GECRB - Walmart Discover $6,000.00 $4,900.00 $1,100.00 18.33%

Nordstrom $500.00 $500.00 $0.00 0.00%

Discover $3,000.00 $1,592.20 $1,407.80 46.93%

Fulton Bank Visa $5,000.00 $2,000.00 $3,000.00 60.00%

USBank $5,000.00 $1,176.37 $3,823.63 76.47%

Capital One $800.00 $800.00 $0.00 0.00%

AMEX BCE $10,000.00 $2,282.42 $7,717.58 77.18%

USBank $500.00 $500.00 $0.00 0.00%

 

I left the 2 business accounts off of this chart.

Edited by netwirejohn

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I would say the AA is due to too high a utilization, they are running scared you will charge it all then file BK. I would work on dropping the util and paying off some of those cards.

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If you are the owner of the business or major shareholder if its a corp they treat it like its all you personally. Its poss the others could follow suit but on the ones you have 0 balance there is really no risk your not using them right now. Good rule of thumb that I use is to never carry more than 40% on 1 card and never over 30% util over all cards. I own my own corp as well and using this method have never had a CLD. You want to avoid paying off 1 all at once and make payments to pay off over 3-4 months, this may help avoid further CLD.

Edited by gdale6

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Would it make sense to make payments to pay off over 3-4 months down to 40%? What about the cards that they had their limits decreased now, as they would be considered closer to 90% now vs 50% where they were.

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I would get it down to that level if you can over the span of 3-4 mo. On the ones that already have been CLD they may balance chase you down as they now are almost at limit. So I would put more $ to the ones that are heavily used that have not done a CLD and throw no more than 5% at a time to the ones who have done the CLD. You will know if they are going to balance chase you once you make the next payment on those cards.

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5% of the balance owed, what you want to avoid is knocking a big chunk off the ones that have CLD until you know they are not going to chase you down as there would be no gain overall if they keep knocking down the limits.

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I would say there is about 4 cards that are close to the limit.

 

I would say the overall UTI is close to 50%.

 

As follows, Credit Limit (old), Credit Available, Credit Balance, Utilization %

 

Citibank 1 $10,000.00 $2,127.65 $7,872.35 78.72%

Citibank 2 $4,000.00 $3,123.01 $876.99 21.92%

Capital One $5,500.00 $5,500.00 $0.00 0.00%

Barclays MasterCard $6,500.00 $4,744.60 $1,755.40 27.01%

USAA Platinum Visa $12,000.00 $2,510.56 $9,489.44 79.08%

DCU Visa $10,000.00 $10,000.00 $0.00 0.00%

Bank of America - AMEX $5,000.00 $2,500.00 $2,500.00 50.00%

Bank of America - MC $6,000.00 $2,100.00 $3,900.00 65.00%

PayPal MasterCard $9,800.00 $921.00 $8,879.00 90.60%

Chase Hyatt Visa $8,000.00 $1,855.32 $6,144.68 76.81%

Chase Slate $700.00 $700.00 $0.00 0.00%

WNNFB - Macys $1,200.00 $1,200.00 $0.00 0.00%

WNNFB - Bloomingdales $1,500.00 $1,500.00 $0.00 0.00%

Citi - BestBuy $2,500.00 $270.00 $2,230.00 89.20%

GECRB - JCPennys $1,500.00 $1,500.00 $0.00 0.00%

GECRB - Lowes $5,800.00 $5,533.98 $266.02 4.59%

GECRB - Amazon $7,000.00 $5,104.34 $1,895.66 27.08%

GECRB - Walmart Discover $6,000.00 $4,900.00 $1,100.00 18.33%

Nordstrom $500.00 $500.00 $0.00 0.00%

Discover $3,000.00 $1,592.20 $1,407.80 46.93%

Fulton Bank Visa $5,000.00 $2,000.00 $3,000.00 60.00%

USBank $5,000.00 $1,176.37 $3,823.63 76.47%

Capital One $800.00 $800.00 $0.00 0.00%

AMEX BCE $10,000.00 $2,282.42 $7,717.58 77.18%

USBank $500.00 $500.00 $0.00 0.00%

 

I left the 2 business accounts off of this chart.

Rough count over $50k. Depending on how you define "close to the limit," I'd say there are at least 7.

 

Depending on how long it has been this way, I'd wonder if other creditors wouldn't jump on the CLD bandwagon. Depending on which credit bureau they use for account reviews, they'll also see how aggressively (or not) you are paying off debt.

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I would get it down to that level if you can over the span of 3-4 mo. On the ones that already have been CLD they may balance chase you down as they now are almost at limit. So I would put more $ to the ones that are heavily used that have not done a CLD and throw no more than 5% at a time to the ones who have done the CLD. You will know if they are going to balance chase you once you make the next payment on those cards.

Wouldn't an issuer just "Account closed by Grantor" if their intent was to balance chase the customer and close the account once its PIF'd?

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I would get it down to that level if you can over the span of 3-4 mo. On the ones that already have been CLD they may balance chase you down as they now are almost at limit. So I would put more $ to the ones that are heavily used that have not done a CLD and throw no more than 5% at a time to the ones who have done the CLD. You will know if they are going to balance chase you once you make the next payment on those cards.

Wouldn't an issuer just "Account closed by Grantor" if their intent was to balance chase the customer and close the account once its PIF'd?

 

 

It would not be good business sense to do so. The banks don't start cutting limits unless they think you are in trouble, outright cancelling the card just might push the debtor over the top into actually filing a BK. If this happens then they most likely get nothing. It makes a better business decision to do it this way. Even if they chase you down they may not close the account but just leave you with a severely reduced limit.

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So just under $63,000 -- and that doesn't include the business cards? Yikes.

 

How long have the balances been at this level? Was there a sudden increase in spending, have you been carrying like this for a long time, or do you have high balances yet high payments (I.e. Not revolving everything this snapshot makes it look like)

 

Even with a high income, you're at the line you're going to start hitting automated alarm bells. If your story is good enough, maybe a manual review after speaking with an underwriter can reverse the automated CLD?

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Well, I am waiting for the notices that Bank of America did say they will be sending out in terms to why the sudden CLD, so I can see if a manual review can reverse the CLD. It seems to be only BOA/FIA cards and one Chase card that were reduced. There was a sudden increase of spending over the past 2 to 3 months as I was paying moving expenses which I'm paying back now, but didn't think they would pull this. The balances varied on different accounts, as I would use one card more often than the other. But I think you're right, as the automated alarm bells, must have triggered and that the accounts they CLD were effective immediately on all accounts the day before 12/1.

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Well, I am waiting for the notices that Bank of America did say they will be sending out in terms to why the sudden CLD, so I can see if a manual review can reverse the CLD. It seems to be only BOA/FIA cards and one Chase card that were reduced. There was a sudden increase of spending over the past 2 to 3 months as I was paying moving expenses which I'm paying back now, but didn't think they would pull this. The balances varied on different accounts, as I would use one card more often than the other. But I think you're right, as the automated alarm bells, must have triggered and that the accounts they CLD were effective immediately on all accounts the day before 12/1.

Yup. Definitely automated alarm bells.

 

Not sure about all lenders, but Chase and B of A subscribe to a credit bureau service that alerts them when you gave a key specified change on your credit report. I get my normal Chase and B of A softs about every 60 days, but as soon as a new inquiry or account or even a CLI shows up they immediately soft me again. In one week I had 3 new hard pulls and a CLI show up and that same week 3 softs from Chase, B of A and, of course, AmEx. Other creditors seem like they couldn't care less.

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If you pull your full report another factor that has recently come into play through extended reporting involves how much you actually pay. By subtracting this month's balance from the prior months and factoring in payments made they can see if you are at risk of overextending. If you could add the following information: what the total minimum payments were, what the total payments made were, and how the total balances changed this month compared to the previous.

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