If you have any lines of credit and you use them to manage your financial flow, you should evaluate your personal money matrix so you’re ready in case all of them get cut. They’re cutting lines of credit even for rocket scientists like reader Rocky. That’s right, he’s an engineer in the aerospace industry, has never overdrawn, never been late, never incurred NSF charges, and has 3 Masters and 2 MBAs. Overnight, they cut his four lines of credit. Apparently his only crime was simply having them. He called multiple times and got nowhere, only to be told to talk to a credit counselor. A credit counselor? Bank of America, he doesn’t have bad credit, he has no lines of credit because you just cut them all. His story, inside…
Rocky writes:
I am writing this letter to state unequivocally the damage that is being inflicted upon not only this citizen, not only this economy, but every honest and hardworking individual in this country that has, for the past months, and continues to be, held hostage by the Banking Industry of this country.
I like many who have been impacted have had all credit lines blocked, or closed. Not because I have ever overdrawn the accounts (I haven’t), not because I have ever been late for any payment (I haven’t), not because I have ever incurred NSF charges in any account in any bank (I haven’t).
I am being held hostage, and have effectively had all of my accounts frozen or locked. I have (or the better word would be had), overdraft protection on my primary checking account, which is with Bank of America. This overdraft line is used as a lifeline by me to balance out obligations when I need to use it. It is routinely flat lined (zeroed out), every 60 to 90 days max. With no warning whatsoever, this account along with three other lines of credit with Bank of America has been locked. I have called Bank of America, and spoken with numerous account managers, all to no avail. Just to get this line unfrozen. On my last call, I was advised to contact a credit counselor.
I always have, and continue, to handle all of my credit responsibly, and the fact they (BOA) could find no late payments, and all payments were substantially over the minimum required, and all accounts have been continuously reduced, was of none of their concern.
I now state something that is an undeniable fact that is presently going on in this country as I sit composing this letter. The Banks in this country are not part of the problem, they are the problem. There are undoubtedly millions of small business men and women such as myself, who have worked hard to build up good credit records so they may have access to credit when they need it, but have had credit lines, and financing needed for their business frozen, locked or terminated.
The Banks in this country, particularly Bank of America are forcing millions of Americans into involuntary bankruptcy. I write this letter, not for myself, as I am not there yet, but I see the pain on the faces of many of my fellow citizens who I know are.
To add insult to injury, one line that I have used that did have a 5% rate, has jumped to 24.99% while simultaneously being locked. When I called Bank of America to see about reducing this rate for the remaining balance, I was read their standard script that there was nothing less available. Again, as I have stated previously, the Banks in this country (Bank of America) in particular are contributing in a large way to forced involuntary bankruptcy and default of millions of American citizens.
When credit will loosen up, is no longer the question. I fear the real question we must now come to grips with is IF credit will loosen up. The brutal truth is I can see no hope if Banks are allowed to punish responsible productive individuals and businesses with financial strangulation. They have clearly become so fearful of giving bad credit out, they now give NO CREDIT out. These Banks need to watch “It’s a Wonderful Life” until THEY get it.
I am employed in Engineering by a major aerospace company, and I will very soon have my third Masters Degree and my second MBA. You don’t have to be a rocket scientist to be able to figure this out, but if it was required, I qualify. In addition I have a second business and am a Licensed Real Estate Broker. In spite of the downturn in the Real Estate market in Arizona, I would be able to weather this economic storm if only the banking industry would be reasonable, but along with credit these are two commodities that are in short supply these days.
Respectfully,
Rocky W.
(Photo: jurvetson)
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I can appreciate the OPs dismay, but it would seem we are missing details here or at least have some inaccuracies. For example, the OP says :
“Not because I have ever overdrawn the accounts (I haven’t)”
Three sentences later he says :
“This overdraft line is used as a lifeline by me”
So Rocky, do you use the overdraft line or not ? If so, an it appears you may be using it repeatedly as part of an ongoing pattern, I can understand BoA wanting to close the lines of credit.
I’m not defending BoA, I think they are marginally awful. But they are in a tight spot themselves and acting to close what they perceive as ‘risky’ lending. Repeated use of an overdraft could well be viewed as risky lending and only prudent for them to stop.
We need to set a few things straight here. First. Banks are in business. They are designed to work with businesses. They are not now, nor have they ever been about customer service. It is unsurprising they do so little to assist people. When people are a profitable business, they’ll assist people. People are not a profitable enough business for banks. Unless you are a business (and a mid to large size one at that), the best place for you is NOT a bank.
The best place for people, individuals, couples, etc., is credit unions. They are about people. They are about service. They are NOT about profit. Deal with a credit union. It’s what the banks want, and it’s what people need. My interest rate on my credit cards is unchanged through my credit union. My overdraft protection doubled this week.
As for having four lines of credit… what does it matter? Maybe four lines of credit separate his expenses, business expenses, family expenses, and school expenses. Great way to track tax write offs. Moot point though. Big picture: Banks are inviting people to go elsewhere for service. This way the bailout money is kept in the bank while nobodies there. So it becomes income for the people that work at the bank. Raises, bonuses, etc… You can’t just abandon a pile of money, you might as well shell it out.
It’s okay to write these letters. Great, go ahead. However, when your done, go to a credit union. Post a letter to the CEO of BofA and let him know you’ve done that. Have other people add their name when they do it. This way EVERYBODY knows the banks are getting their way. People are going where they’re wanted. Then when nobody is left using banks, they DIAF… hopefully.
B of A raised my credit card interest rate from 6% to 28%, though I’d never missed a payment and have very good credit. They told me I needed to talk to a credit counselor, too. Could not have been more condescending about it. From what I hear, they’ve been doing this a lot lately.
Yeah BoA did this to me recently too, I had a Visa with them (as well as checking and savings), have never been late, always pay over the minimum, model cardholder. The card was a balance of around $8700 with a limit of $23,000. I paid $4000 last month and noticed on my new statement they had cut my limit to $6000. That card was my buffer, now it’s gone, no warning, nothing.
Admittedly I have quite a bit of debt, but it’s in large part due to having two kids under 3, one with medical problems so my wife has to stay home. I make pretty good money, but it some sudden big expense come up now, we’re boned.
1] BoA is desperate.
2] You pride yourself in being a rocket scientist, yet you failed to provide yourself source redundancy. (Ouch. Sorry!)
Despite him having all these multiple degrees he still doesnt understand what having over draft protection is.
Its not to live on, on a monthly basis. All that does is protect you in case you have insufficient funds.
wow,..MBA’s and Ph.D couldnt even teach him that. What a pity.
Oneandone,
That makes perfect sence if that is the case, that was the kind of answer that I was expecting.
Thank You
At least those of you to whom this has happened seem to have been notified. I had a line of credit with BoA that was recently closed and I never found out until today, when I tried to access it (I had been carrying a zero balance on it for well over a year). Thanks, Bank of America! At least now I have NO accounts with you, and I plan to keep it that way.
I just had one of my credit cards reduce my limit by $3k – down to my balance, without notice. I hadn’t missed any payments and paid more than minimum. When I called I was told I’d get a letter in the mail and they wouldn’t reconsider. I got the letter today – 3 weeks after my limit was reduced and the reason: “lack of open real estate account”.
Huh? That’s a laugh. I own my home, free and clear. There is no mortgage or threat of foreclosure and that’s a risk? My problem is my credit report looks like I maxed out my credit card v. having available credit. I have no idea what this might do to insurance payments or other credit accounts I have. But this does make it seem like even usually credit-worthy people could be considered poorer risks due to no fault of their own. Everything seems to rest on the credit score.
When I went on line, I found thousands of people complaining about reduction in credit limits from all cards and banks. Am Express, MNBC, Citibank … all of them did the same things; no notice, very recent and “just because they can”.
Without allowing available credit, the only income credit cards can get will be from increasing fees and interest rates. A person doesn’t need to have their limit reduced to feel that effect.
The more I thought about it, the more I came to the conclusion this guy did. Banks and credit cards monopolized and were strangling the US economy and holding us hostage. No industry should have that kind of power.
And this is happening at a time when more people might need credit to tide them over. I don’t see this as a coincidence or accident. I see this more of a way for banks to undermine public policy. I didn’t vote for banks to be in control of the US economy.
I hope banks and credit cards are nationalized. The sooner the better. Then I bet owning a house wouldn’t be considered a credit risk.
Now I’m confused…
I, too, use overdraft protection. I have it pull from an auxiliary savings account, instead of a credit card, and about 3 or 4 times a year an automated payment goes through before a paycheck does (or I just do something forgetful) and the overdraft protection has to kick in. Offen times I check my balance and do a manual transfer before the end of the day and prevent the overdraft from finalizing.
My question is; would BoA consider this risky behavior and would they use that to limit my credit card card?
I ask because I got my nasty-gram from BoA yesterday… here’s that story as copied and pasted from another kvetch of mine.
BEGIN KVETCH…
I just got my rape letter from BofA yesterday and got a 10.75% increase.
I went from fixed 9.99% to 20.74% variable starting May. All this despite holding a zero balance on the card, not a single late payment in 3 years, and this week being my 9 year anniversary with them.
“It’s nothing you did, it’s just the current economy”.
That’s OK… I’m keeping the credit card and transferring our family’s $10K+ in liquid assets to a local credit union. Sorry BofA… It’s just the current economy.
END KVETCH.