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Banks are STILL your friends. NOT.

You probably already know that the banks issuing credit cards are raising interest fees and lowering limits.

But how's THIS for a neat trick?? Banks are lowering credit limits to below what you owe... and THEN charging you an extra fee for having a balance that exceeds the newly lowered limit!

"Paul Pensabene of Saratoga Springs, N.Y., received a statement from HSBC on Dec. 8 that said he had a $359.99 balance and remaining available credit of $8,640. But when he went online to pay the bill several days later, his online account showed that same balance put him over his newly-reduced credit line of $300. And that didn't include the $35 over-limit fee."

Click here for full story (from SmartMoney via Yahoo)

There's more below. Read it and weep.

So what I STILL want to know is why so many people are blaming the current economic hicccups on the naive, otherwise honest people who were were arm-twisted into accepting sub-prime and second mortgages by unscrupulous bankers and brokers instead of placing the blame where it REALLY belongs... on those greedy, heartless banking businesses that want to shake you down (either directly or through your tax dollars funding those "bailout" bills) for as much money as they possibly can.

By the way, did you hear about AIG (American International Group, a major insurer of residential mortgages, among other things), which recently snagged a $165 BILLION dollar bailout line of credit from Uncle Sam (because it was "too big to fail")... THEN announced it was giving $10s of millions in bonuses to its top executives?

Gee, I wonder how big those bonuses would have been if they HADN'T driven AIG into the ground.

Are you mad yet? Then you don't have a pulse.

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SouthernBelle 03/16/09 - 09:08 am
The credit industry is crap ovidsen..

The story that happened to that man happened with just about all 3 of my credit cards. They cut my credit limit (even thought I had $6-8k in available credit on all of them), to within just dollars of what I owed. Do you know what that did to my 730 credit score??? Because now, I was maxed out on all my cards, instead of having an available balance, it dropped my score over 100 points!! WTH!!!!
I always paid over my minimum due, and on time, never late. This happened to me a little less than a year ago. One card undercut me, I owed something like $550, they cut my limit to $500..and charged me over-the-limit fees, and knocked my credit score down more.

It's the most frusterating stuff ever. I know I'm wrong in my response to this issue, but when none of them were willing to help me, or gave a crap, I cut up the cards (and the bills), and told them to shove it up their butt. I'd had some of these credit cards for the past 10 years, never being late. I told them I'm done paying them, send me to collections, because they already F'd my credit score anyway. Whenever they call me about it now, I tell them to take what I owe them out of the bailout money they got...twice..

I know that by NOT paying them now, I am a contributor to the problem, but they screwed over a good paying consumer, and even though my credit is now totally screwed, I like living on a cash only basis. Plus, it makes me feel a LITTLE better to tell them to shove it. They got greedy, now they won't get another dime from me.

heron55 03/16/09 - 09:38 am
Credit card manipulations

I think everyone had the reduction in approved credit limit lowered. Mine was lowered too and I have good credit.

From what I understand, the approved credit on each person's card becomes a part of the bank's total unsecured liabilities on their P&L statement. Because of the overall industry credit problems, the banks wanted to improve the P&L statement and lowering the unsecured liability portion would improve their credit standing with the Federal Reserve Banks.

Since our personal credit score has a part of the calculation based on the availability of credit to each of us and the amount we have used of that credit, lowering the availability would make the used credit closer to the actual amount used and could lower our credit score. It does give the impression that we have maxed out our credit. If you are applying for credit and the score becomes an issue, you should explain why. It would be an acceptable widespread issue.

As for overlimit charges caused by the reduction, I would call the bank and protest. It is probably an error that the programmers didn't anticipate.

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