h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

I know a woman who had a credit card with a limit of $1500. She owed a little over $800. So, without any notice, they cut her credit limit to $700 and charged her an over-limit fee of $39. And apparently it was legal.

I made a point of using each of my remaining credit cards recently. Several months ago one card that had just lowered my APR to keep me, Capital One, sent me a letter telling me that my default rate would be jumping to 29%. Well, before I realized that was just the rate for late payments and not the normal APR I called to threaten to cancel if they did raise it. Normally I'd expect to get some haggling from the card company, not this time. "Thank you for your business, if you change your mind in the next three months..." Done. I was mad that they were raising my rates when I've been a very good customer, never late. Well, I wasn't using their card enough is probably why they were raising the rates according to a news story I saw. They were looking to dump as many "good" customers like me as they could. They don't make as much money on folks that pay their bills on time.

That reminds me, I got an email from AMEX the other day offering me an upgrade, I really need to take a good look at that offer, it might be worth it.

From what I've read, dumping a credit card is a bad thing because it actually makes your credit score go down. The entire system is screwy. I had a card with WaMu when they went under. They were bought by Chase and up until recently, they honored the original terms. Well, I got a letter from them a few weeks ago telling me that since I was so far under my credit limit, they were reducing it by $700 to bring it more in line with my needs. What a crock. But that sent my credit score down because now the percentage owed compared to the amount of available credit went up. And if I pay it off and cancel it, my score will go down more. So what I've decided to do is pay it down but make a small charge on it every month to keep a balance showing on the card.

You mean "credit scar".

Yea, I understand now that my score may have gone down, but I don't care about that much. Besides, getting that upgrade offer indicates that it couldn't have gone down too far. My credit history is excellent. I still have two active 'premium' credit cards and a debit card.

Having a very high credit score means that you probably carry a lot of debt, that you pay a lot in interest. A high credit score comes from having several debts and making payments on those debts but not paying them off right away. I do probably have a lower than average credit score because I only use my credit cards occasionally and almost always pay those debts before any interest has been levied. (I did let a couple of debts, one on each card, slide for one month this summer mostly just to make sure I didn't deplete my reserves and also to bump my score just a bit.)

Of course I'm not sure what my actual score is because I refuse to pay for any of those "free credit score" reporting services. (I do check my credit reports on https://www.annualcreditreport.com , the only truly free service in the States.)

yeah, I don't know. My Target Visa's credit limit was lowered twice in the past six months, both times to just UNDER what I owed (not a huge difference, a couple hundred one time, a couple hundred the next) and if I hadn't paid more than the minimum, I would have been over the limit. It's ridiculous.

What a world. Being in debt up to your eyeballs makes you a better credit risk than someone who pays their bills off every month. And if you're fortunate enough to be able to live within your means and just pay cash for the things you need, you're considered unworthy of credit because you don't have any.

I have high debt, but it's all mortgage. (@#$^@ STBX!) I have 2 major credit cards, my habit is to use them to pay almost all my bills and pay them off almost every month. So they have high usage, but they are not carrying much, if any, balance. Rates on both of them have been increased but that doesn't affect me as long as I don't carry a balance. My credit lines have not been reduced.

Since I am applying for a new mortgage, I recently learned my credit score is 807. I'm pretty darn proud of that.

It must be different here in Oz. When I went for my home loan I was advised to lower my credit card limit from $6000 to $3000. It didn't bother me, as I hardly used it anyway. Not long after I lowered it I got a letter asking me if I wanted to increase it back to $6000!
I've heard similar stories from other people.

Then, not long after I took out my mortgage I got a letter from another bank offering me a gold credit card! This was before the GFC.