Why are credit card companies closing credit on customers out of the blue?
I just out of the blue received two letters for two of my chase bank accounts, saying that they elected to close my accounts because of: 1 incident of a returned payment on the accounts, too many accounts opened recently, and too many inquiries.
Anyways, these accounts used to be wamu credit cards, which recently switched over to Chase, and not even a month or two into Chase..chase decides to just close my accounts just like that.
Now…what the HECK did I do wrong, so majorly wrong that they decided to do that? why would credit companies do that?
they already jacked my interest rate up to 29.99% and if that wasn’t enough..now they decided to close both accounts.
First of all, will this look bad on my credit score, and how long will this affect my credit score, second of all, WHY are they such …Aholes and out of the blue did this,…even though my payments and history have been on time and great,
and third, can accounts ever be reopened, or once they’re closed, that’s that?
I’m just shocked. Is this because of the economy and the credit card industry suffering, or is this because of something else?
I just am scared..I knew that credit cards were slashing credit lines, jacking interest rates and adding other unfavorable things, but now…I didn’t expect this out of nowhere. I’m terribly disapointed, and I guess there goes two years worth of positive history….just because of one returned payment (which was my banks fault for putting my money on hold), and because they claim i have too many new credit cards and inquiries, because I’m trying to re-establish my credit after going bankrupt in 2005.
Oh well. chase is horrible.
I heard that a new law is being passed to keep them from doing that, to make it harder at least, but at the same time it will be harder to obtain credit.
Any ideas?
Thanks.
Although wall street has been pretending that the US banking crisis is over, there are very deep problems in the US banking system. Things are going to get much worse before they get better.
According to IMF estimates, US banks have lost $2.7 trillion over the past several years on mortgages. It is expected that they will lose another $1.2 trillion on credit card debt and auto loans. The amount that will be lost by US banks is greater than all the profits ever made by all US banks since it became a country.
We have already seem some of the things that banks have been doing including making it very difficult for anyone to get a credit card unless they have a credit score of 720 or greater, little ability to get a conventional home loan without a major down payment and good credit score, charging very high interest rates on car loans for anyone below a 720 credit score, increased bank fees including overdraft fees (ex. B of A now charges $35 per 5 days), and increasing the interest rates and minimum payments and decreasing credit limits on credit cards.
Now it appears the banks are evaluating the credit worthiness of their existing customers. They are no longer just using the credit score as an indicator but are now looking at the debts of individual customers to analyze the risk of possible default. If they feel the possible risk is too high, they are closing down the accounts.
The only individuals that are likely to survive this crisis unscaved are individuals who maintain their credit score by rigorously paying their bills on time and keeping low debt rations.
March 8th, 2010 at 1:10 amThere are new and far reaching credit regulations coming from the Obama administration. Credit card companies are attempting to make all the changes they can before the regulations go into affect. At this point, anything in your history that might make them nervous will draw attention to your account.
March 8th, 2010 at 1:10 amThey are doing it because your behavior points to future credit problems. They are closing accounts before they become a problem. Is this unfair? Maybe. You can certainly talk to them to see if you can keep one account open. Do you really mean that they are closing a bank account? This is odd as they have not lent you any money in these accounts. Credit card accounts I could understand.
March 8th, 2010 at 1:10 amChase acquired the assets of WAMU, including high risk accounts. They are clearing high risk accounts off their books. Do you not see that a bounced payment is a bad thing? Couple that with inquiries and new credit lines, it sounds like you may be in financial trouble.
Even after the new laws go into effect, credit card companies will have the option of closing accounts. Creditors can’t be forced to extend credit. It is not your right to have a credit card.
March 8th, 2010 at 1:10 amYou have to understand, don’t take it personal. Banks are protecting whatever assets they have. Put yourself in their shoes and pretend that you had your own bank and you lended 500 people thousands of dollars. All of a sudden 200 of them tell you that unfortunately they can’t pay you back what they have already spent and they still have available credit with you. What would you do? I would be proactive and reduce everyones lines so that I can stay in business. Your answer to that question is what banks are doing right now. Don’t take it personal, instead put yourself in their shoes.
March 8th, 2010 at 1:10 amBecause you’re not making the payments you need to. Period. Why would they be in debt for you? Come off it.
March 8th, 2010 at 1:10 amQuit blaming everyone else but yourself, it was your fault because of a returned payment and it was your fault for the bank to put a hold on your account.
March 8th, 2010 at 1:10 amYou are a risk and bank want there money, just like you would if it were vice versa.
Pay your bills on time and this won’t happen and take responsibility for your errors.