GEICO Mastercard Slashing Everyone's Credit Limit To $500?
Dan wrote in to let us know his $8,800 GEICO Mastercard now has a $500 line of credit. "It's not you, it's us," is basically what GEICO told him in their letter on March 12th. They also say they're doing this to every one of their Mastercard holders. Dan notes, "Interestingly enough, this new limit is less than the 6 month rate GEICO was charging me for my two cars, meaning that I couldn't even use their preferred card to pay their premiums." You can read their letter below.
As a side note, we wonder what the average FICO score will be once all the credit card companies are done with all this credit limit slashing.
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Sounds like Geico is trying to get out of the credit business. Being a one-stop-shop isn't so appealing any more, ehh Geico?
I'm curious. If one paid an annual fee for an $8,800 credit limit card and one month later they slashed the limit to $500, would they refund a portion of the annual fee?
I have one of these, and my credit line is still over $500 - Of course, now that I've posted this I'm sure it'll change pronto, but as of now, I'm not a victim of this.
...also... "we did not obtain a credit bureau on you"?
I think they accidentally a word.
GE Money Bank has been doing this to me as well. Every couple of months they keep reducing my HHGregg credit limit as I pay down my balance that I have at 0% with them.
Now that I think of it, I had a Circuit City card with chase and they never switched it to a plain visa or mc after the stores all closed. hmmm
Don't we just love these consumer friendly credit card companies. I hope they all go bankrupt. If you call to close the account you get the line about it will hurt your credit report, well I'm here to tell you losing 8,300 worth of credit limit will hurt you as well.
Why do business with someone who honestly doesn't look at you as a valued customer?
I think that the author may have misread the letter. The way that I read it, it sounds like anyone who has over $500 of available credit will have their credit limit cut. My guess is that the OP maintained a 0 balance on his card, which is why the company slashed his limit. Had he maintained an $8400 balance, I bet they would have let him keep the limit.
Hah... I just noticed the gecko is holding an axe! Great pic! Yeah, I've been reluctant to pay much more than the minimum towards my balance since I figure they'll slash my rates as soon as I do anyways. My only goal now is to stay current with everything and not even worry about my fico for the next year or so. As long as I don't mess something up, it will recover eventually.
All bow to the mighty FICO, isn't it sad that to keep your score high you must carry a balance (but not to high, that hurts), paying them interest or fear getting your limit cut.
There has to be a better way to live, I hope this recession fixes some of this crap for the future.
Geico won't charge installment fees if you use their card. Its the only reason I have one (although I kept it after I left their Insurance). As such charging a 6 month premium to the card is not in your best interest, assuming you charge it to their card and pay in full each month.
The back of the card says it was issued by Merrick Bank, but the web site and my credit report say New Millennium.
What's the new limit on non-Platinum GEICO cards? Nothing says "Platinum Card" like a $500 credit limit.
Warren Buffett will NOT be your bitch and carry your sorry ass through 'these troubled times'.
I'm wondering how much they'd make in overlimit fees for anyone carrying a balance of $501 or more?
@speeddaimon: To me it reads that they have customers with a credit limit less than $500, and they are saying they aren't raising the limits on those accounts.
I find this really funny considering I just got my first ever credit card at the age of 18 and get a $500 credit limit.
"Geico Platinum Mastercard Card?"
Is the card administered by the department of redundancy department?
It's not everyone. I just looked at my card and it's still at $1,100.
Warren Buffet was right.
The economy is/has going/gone over a cliff.
That letter looks like something you would see coming out of Nigeria. No logos of any kind. "Mastercard Card"?? "Obtain a credit bureau on you"? WTF?
I call B.S.
@edebaby: Trust me, it's real -- I called the number on the back of my card to cancel the account when I received the letter -- they offered me a 4.9% APR on my $500 limit, and warned me that I was forfeiting &\7 "GEICO bucks" (the horror).
GEICO, incidentally, also lost a customer in this deal. USAA, all the way, baby.
There's nothing grammatically wrong with "did not obtain a credit bureau on you".
After reading this article I logged into my account to find that my credit limit had been slashed from $9500 to $3900. And my APR had jumped from 9.9% to 12.74% without cause.
No letter, no emails, no notice at all.
I WAS a satisfied customer.
@☠Grяrяrяrяrяrяrя's 1997 Sonoma has gone an entire 254 miles...: It's the Geico Present's Geico's Platinum Mastercard Card Sponsored By The Platinum Mastercard Card brought to you by Geico.
And I just got a letter in the mail from Chase saying they doubled the limit on my Chase Freedom card. Weird.
I had requested a credit line increase 2 months ago on the card and they denied it. But today I checked my mail and saw a letter saying that my new credit limit is more than the one I had asked for 2 months ago. Go figure.
@edebaby: "Mastercard" is a proper name, even though it ends in "card" it's still a "Mastercard" card.
@MooseOfReason: No, it's grammatically correct5, it just doesn't make any sense as a sentence, like "I fought the pie hammer until the blue monkey crayoned."
Well, no more buying computers with that card ... unless it's a bottom end netbook.
Yup. I had GEICO for 14 years. They kept raising my rates every 6-months even though I have a clean record. I finally got a quote from Allstate and they quoted me $200 less than GEICO. I even lowered my deductibles with Allstate. Save 15% or more my @ss!!!!!!
Slashing credit limits. So easy that a caveman could do it.
They have to come up with a way to pay for their freakin' stupid gecko commercials...
HSBC just cancelled our card due to "inactivity". we had no balance and hadn't used it in several months..maybe a year I guess.
None of this surprises me. unfortunately.
@johnva: What's not true? I fyou are over 50% of your limit it can adversley affect your credit score, and having an unused available credit is also a ding, because it shows the ability to run up a large debt load.
A $500 credit card is useless, because as soon as you charge $250 you are doing yourself harm. My HSBC card just lowered my limit from $5000 to $500 last month. It was a card I have not used but once in the last 12 months. So I closed the account, and the dreaded "retention supervisor" told me, I quote, closing this account will adversely affect my credit score. I told him that keeping this card would adversely affect my common sense in doing business with someone who thought so little of me as a customer.
My Geico MasterCard was cancelled after three months of inactivity.
Thanks, gecko!
@iboost79: Mine keeps getting lowered every 6 months. They even sent us a 58 dollar check for overpayment. It may be because we recently got married and I'm about to reach the magic 25 but I hope it continues
All this stuff and I just got a letter from my credit card company upping my limit...it's a Speedway Mastercard if anyone is interested. Guess paying it off every month wasn't earning them enough money. ;)
I thought that was GEICO's business model---be there for you, except that when you need them they say "sorry, you're on your own"
Does GEICO actually issue their own credit card...or is it just their name and rewards program slapped on an actual bank's card?