Banks Get Stingier With Credit Cards

Rising defaults and people behind on their payments have credit card companies retreating from the marketing and lending orgy of the past few years. Here’s what the different banks are doing to shore up their positions:

American Exrpress: Getting more prudish when you ask to up your credit limit
Bank of America: Tightening standards, looking closer at debt on books
Capital One: Tightening standards, hiring more debt collectors,
Citigroup: Tightening standards, raising minimum scores, letting people do a forbearance (a temporary reprieve from having to make payments)
J.P. Morgan Chase: Will stop showering credit card arbitrage players with offers. Reaching out to customers behind on payments to work out a plan.
WaMu: Slowing down direct marketing efforts

If you’re trying to get a credit card this year, its’ going to be harder. Your credit score and credit history are going to matter more. Banks are also going to pull your credit reports from all three bureaus instead of just one, making it even more important to check out all your reports for free at annualcreditreport.com and make sure everything is correct and dispute the items that are not.

Credit Cards Are Playing Harder to Get [WSJ]
(Photo: mod*betty)

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  1. billbillbillbill says:

    Thank goodness with Chase. I feel like I get an offer every couple of days. They also upped my credit limit by $8000 without asking last year. I had to fight them to just lower it to what I wanted. It shouldn’t be that easy to get all the credit you could ever want.

  2. orielbean says:

    My WaMu card has a sweet functionality on the web. It will show you your month-to-month FICO score from one of the 3 agencies. It helped me refinance my car loan on a really good month I had and it has been invaluable.

    It also notes your delinquencies and other open accounts like a regular credit report. Doesn’t cost me anything and I finished paying it off so there’s a 0 balance on it. When I got the card, the APR was bad but otherwise no complaints.

  3. mixinbeatz says:

    Why would you lower you cedit limit BillBill? Don’t trust yourself?

  4. nursetim says:

    So does this mean I won’t be receiving any more credit card offers in the mail? At least once a week , I get something from Capital One for me and my wife, sometimes more than one with my name or hers on it. Was never able to figure out what the deal was with that.

  5. Sudonum says:

    If they are getting stingier why am I getting even more offers from Chase, Citi, and Discover? Hell one day there was 3 from Chase alone.

  6. Starfury says:

    You couldn’t tell this by the number of apps I get in the mail weekly. Chase is bad, so is Discover. Why would I need/want a 2nd, 3rd, 4th, or more credit card from the same company?

  7. satoru says:

    I wonder if they should adopt the system they use in Japan? It’s almost impossible to get a credit card there. Those Human Tetris videos are actually credit card applicants!

    Ok not really but the entire credit industry seems to be hard to crack. Where a gold or platinum card is an ACTUAL sign of status (there aren’t student platinum cards).

  8. That70sHeidi says:

    I too like my Wamu. I had a good intro rate (0%) and it’s almost paid off. My mom got a home equity at a dirt cheap rate and is paying off two CCs with it (plus home improvements). Get stingier, see if we care!

  9. TWSS says:

    @mixinbeatz: I can’t speak for Bill, but I don’t like the idea of identity thieves (or just plain and simple purse-snatchers) being able to rack up an additional $8000 worth of fraudulent charges under my name.

    Yeah, fraudulent charges are normally 100% reversible, but if it takes you a while to figure out what’s going on, you could still take a hit to your credit that can waste hours of your time sorting out.

  10. pastabatman says:

    Trees worldwide rejoice! Their plan worked perfectly. Almost too perfectly…

  11. NewYorkNewYork10001 says:

    If c.c. companies need to cut costs, then by all means reduce the number of offers they send out. I’m getting up to six offers every single day and I dutifully shred the application form that has my name and address already pre-printed. And it’s just plain annoying.

    At some point, the cost of sending those out is going to exceed the amount they generate from new accounts they bring in. Especially if many of thse new applications get rejected due to more “stingier” requirements. Does anyone out there find those offers to be useful and worth the aggravation; other than the c.c. companies?

  12. ShortBus says:

    You all know you can opt out of receiving card offers, right? It takes two minutes: [www.optoutprescreen.com]

  13. theblackdog says:

    Citibank, Chase, and Discover all seem to really want my business, I get an offer from them every week.

  14. Toast442 says:

    Chase just recently decided they didn’t want me as a customer. I got a letter in the mail raising my interest rate to 29% on my personal card.

    I don’t normally carry a balance (occasionally on large purchases/emergencies for a month or two if I need it), never been late – couldn’t figure out why. They completely refused to lower the rate so I canceled my personal AND my business accounts with them. We’re in the process of moving our business banking away as well.

    Prior to this, they tried to cancel our business cards (which NEVER carry a balance.) It took intervention from a friend of a friend private banking rep to undo that mess. But the interest rate hike was the last straw.

    Guess I don’t make them enough money. Funny thing is I still get one or two offers from them every single week.

    AMEX was happy to take my business. Suck it Chase.

  15. Sudonum says:

    @ShortBus:
    Nah, these offers let me know I’m wanted and loved, even if it is only for my money.

  16. Remarkable. If they tighten offers out, it might be the start of actual fiscal responsibility by these companies?

    Any attempt in the source material to address revenue growth? You’d hate to see the publicly owned companies go for a strategy that’s going to bury their stock price. Quick tip to future CEO’s out there. The market loves growth, hates retreat.

  17. TechnoDestructo says:

    @Toast442:

    They’re starting to turn into something like the vending machines at airports (well, American airports). If you can make 3.50 selling 1 soda for 4 bucks, why would you bother trying to cater to the people who’ll get you 50 cents for selling it for a buck? You only need to keep 1 sucker out of those 7 you might have had otherwise.

    Of course they seem to be ignoring the fact that we cheap customers aren’t the ones costing them money…or at least, not all of us are. They’re costing THEMSELVES money by trying to dick us with bullshit fees and billing “errors.” I would probably call my credit card company once per year if it weren’t for things like that. Instead I was (before …supposedly… cancelelling my Chase card) wasting 15-30 minutes every couple of months. Money I only cost them through their own dishonest greed and/or stupidity.

  18. HooFoot says:

    Oh please. I have a family member who has no job, owes thousands in student loans, and has no credit history to speak of beyond the student loans. She got three credit card offers this week from three separate companies. One of them boasted about a guaranteed $2000 credit limit upon signing up for the card.

    To nobody’s suprise, the cards offered are terrible. 25% interest or more, $50 annual fees, minimum finance charges–even if you never bought anything on them, you would STILL lose money.

    I’m the first one to preach about personal responsibility, but these companies are shameless and appalling.

  19. SacraBos says:

    Darn. I can practically heat my home in the winter by burning credit card offers in the fireplace. I’m going to have to fill out bingo cards again.

  20. goodkitty says:

    @PotKettleBlack: Unless you’re Google or Microsoft, and even record quarterly profits will slash your stock prices because it wasn’t “enough growth.” Unless you’re Yahoo, where slashing your workforce by 25% just to stay afloat means your stock prices go up 64%*. Bizarro economics works!

    (*Yes, I know that was just because of Microsoft’s offer, but still, you can’t help but to smile at the fact that it’s still true.)

    I have always paid my bills on time, and never bought something I couldn’t afford nor needed credit. Because of that, I can’t get a credit card on decent terms, but several of my friends, who have had cards revoked, been kicked out of places, and spend every penny they have as soon as they get it, have cards up the wazoo. Bizarro economics works.

  21. digitalgimpus says:

    My guess is this will help nobody. People with limited (but good) credit history, or none at all will be denied, and people with moderate credit problems will get expanded credit lines. At the end of the day, being late on payments means more money for credit companies. Late fees/interest = profit.

  22. pestie says:

    its’ is never valid punctuation. It’s either it’s or its.