Credit Line Reduced

I had a BOA credit card with $20,500 limit.  I called to dispute an auto warranty charge that was cancelled within the 30 day “review” period.  The quick talking customer rep stated that with my long term status and excellent credit, I qualified for the 0% first year credit card.  I could swith my limit to it. 

I asked to keep the first one open with $5000 and the other transferred to the new card.  Imagine my surprize when I got several credit alerts on my credit monitoring of my 853 going to 830.  Well, the new card came and it was $5000 and the old card was also reduced to $5000!  New card only good for cash advances and balance transfers. 

I called to find out what was going on and they said that due to the banking industry, all banks were doing this!  I told her that I have a federal job, paying $60,000 yr/no prospect of being laid off, paid off house and cars, so why was I a risk???? 

Told them to cancel the new card and put the rest back on the higher interest, but longer established card.  I’m hopping mad.  Is this truly a new banking thing or did they just pull a fast one on me?  I’m so mad, I would like to close out the card!  I liked to know I had the high balance “just in case” of emergency.  Didn’t this just lower my score?  She said no.  I think it is BS. 

Your opinion????  Thanks for all your good advise!

Gayle

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Hi Gayle,

By and large credit that a borrower qualified for in times past will have a higher credit limit than that which the same borrower (with the same income/credit score) would qualify for today.  So, in general, expect that the bank might lower a credit line given that the door was open to reevaluate.

One big change that did go into effect recently was the Credit Cardholder’s Bill of Rights of 2008 which did force banks to change the way they deal with consumers – the net affect of which is an overall reduction in credit.

Thanks for the questions and hope this helps.

Paul