Confessions of a Laid-off Lawyer

Just Your Average Joe Blogging Away His Debt—In One Year or Less

Absolutely Infuriating

with 3 comments

Total Black: $85.38
Total Red: $246,889.20

I spent nearly two hours today on the telephone with Bank of America.  And I’m practically at my wits-end. 

I received an alert today from Experian, the credit reporting agency.  Bank of America reported my Upromise Master Card as being over the limit by $28.  What infuriated me—to start—was that I exceeded my credit limit because of the reduction by the Bank to my credit level.  Had they left my limits where they’d been a few weeks prior, I wouldn’t now have another negative report on my credit report.  Talk about kicking while down.

So I called the bank to complain. I spoke to some lackey who explained policies and procedures and other humdrum nonsense.  I complained, once again, about the utter illogic of cutting one’s credit limit while citing a poor credit score as justification.  Dropping one’s credit limit, and thus reducing the debt-to-credit ratio, further harms one’s credit score.  It’s like arriving somewhere with a few sniffles, being kept out in the elements where the sniffles worsen, and then being told you can’t come in because you’re sick.  Being kept out in the cold further exacerbated the conditions that led to the onset of the cold.  Same here.  The bank says my credit score is low and that I’ve been having difficulty making payments.  So what do they do?  Drop my credit score.  That means I now end up over the limit.  And they dropped my limit not by $500 but by nearly $1,000, leaving me with a $100 balance—nearly ensuring that I’d be pushed over the limit just by monthly finance charges alone.  Unless I sent even more money, I suppose.

In expressing my frustration, I asked whether this would happen again if I made further payments: when would it stop?  I was told that there’s no guarantee that my credit limit wouldn’t be further reduced.  No guarantee?  “How low could they go,” I asked.  “Five hundred dollars is the lowest credit limit I’ve seen,” I was told.  A five hundred-dollar limit.  Insane.  What’s the incentive for paying down credit cards quickly if we’re effectively be punished for it?  See, my account came up for review because of the sizable payments I made.  Ok, then the way to avoid that reoccurring is to make smaller payments—or at least not make large payments.  And who does that benefit?  The bank, not me; they get increased revenues that way.  The CARD Act intended to curtail such lending behaviors—at least on one end: the credit card companies cannot penalize customers now by raising APRs because of problems with other debtors.  But nothing stops them from reducing your limit, a similar penalization.

Next I asked about my APRs.  All three forms of credit: balance transfers, cash advances, and purchases are at the same rate: 27.24%.  The only way to have those APRs adjusted would be to enter into a hardship program, which would close my accounts and put me on a payment plan.  That would mean I’d lose two of the three credit cards I have with no guarantee that Bank of America, or any bank, would re-extend credit to me.  Sadly credit cards are a necessary evil of our times.  And, when used properly, can help in times of trouble.  A secure card—a fancy debit card frankly—one prepaid by your own cash, that doesn’t cut it, especially not when renting cars or hotel rooms.

At any rate, I asked about what portion of my balance was allocated to cash advances.  Approximately $500 I was told.  I knew there was no way—none—that I had withdrawn over $500 in cash from ATMs.  Especially since I can’t recall the pin number to this card, nor the last time I withdrew cash on it, and would have been paying it down each month steadily.  I learned that purchases can be processed differently by vendors.  A bill payment or a tax payment may get processed as a cash advance, even though you don’t withdraw cash from an ATM.  A cash advance!  Says who?  I asked how my payments were spread out over the various charges—thankfully I don’t have any balance transfers, so it’s only two categories.  I mentioned the CARD Act again and noted that it spoke to paying one off first.  The customer service representative explained that the CARD Act requires payments go to the higher APR first, then to the lower.  But I pointed out that the Bank has circumvented that law by setting all of my APRs at the same rate.  Another example of Bank of America finding loopholes.  I asked if I could have one APR adjusted—by even .01%.  No.  Enter the hardship program was what I was told.  I asked to speak to a manager.

That got me nowhere.  I repeated all of my points above.  Same answers.  I had asked to the first customer service representative about increasing my credit back up to $5,000—a $300 increase.  He assured me that he could do that.  All he did was put in a credit increase request, something I could do myself.  He wasn’t given an immediate answer, he said, so he couldn’t tell me the results right now.  Translation: denied.  In speaking with a manager, I asked again about an increase.  She took my information, my new salary, job info, etc., and then said no.  She cited the Raymour & Flanagan charge-off as the reason.

I have never, ever, been so frustrated with Bank of America as I am today.  They won’t increase my credit by a mere $300.  They won’t adjust any of my APRs so that my payments can pay off one portion of my balance load first over another.  They had nothing to say about the over-the-limit notice sent to the credit reporting agencies: that’s done by computer, I was told.

And, though not directly related, I still haven’t received my replacement debit card; as mentioned back in Miami Is Not Nice, Bank of America canceled my old debit card before ensuring that my new debit card had arrived and was activated.

There should be a legal action for corporate stupidity and resulting harms.

Total red is up because I had to borrow another $3,000 from my mother.  I sent about $2,5000 of that money to my American Express card.  Not making the same mistake twice.  I can’t use my debit card, so I needed to use a credit card to make another down-payment on the new car.  I sent the other $500 to the Upromise card—again—because I need to renew the rental car again tomorrow and I’m not sure if Budget here takes AmEx.  Just in case.  Hopefully I won’t be reporting in a day or two that my credit limit was reduced once more.

3 Responses

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  1. I don’t know…while it is terribly inconvenient for you, I don’t necessarily think what the bank did to you if the worst thing that could have happened.

    Your track record (I’m not judging you, just look at it through the bank’s eyes) shows that you’re a pretty high risk customer who gets in way over your head with credit/loans/whatever. So you pay it off and they drop your limit down accordingly. This keeps you from further self-destructive spending and pushes you from using credit to using cash, or not spending. This is something we’ve (and you’ve said yourself) that you need to do.

    This is going to continue to happen to you on all of your credit cards, as long as you are listed as the party responsible for paying them back (without a co-signer). If you want access to credit that won’t get shut down, you’re going to have to be an additional cardholder on your mom’s account, but honestly, I don’t think you should do that, as I think you are going to be coming up short on your new salary, so I think you’d just end up with yet another card with a topped out balance hounding you (and your mom, and your guilt).

    I wish I had an easy answer for you… I still keep coming back to credit counseling and some type of bill consolidation as the first step in getting out of this mess.



    June 25, 2010 at 08:59

  2. I know you’re really opposed to the idea of a hardship program or even bankruptcy, but you’re only hurting yourself by trying to play this game with the banks. You have a *lot* of credit cards. Far more than you need. Closing the accounts will only help your credit score.

    Jim in Chicago

    June 25, 2010 at 10:28

  3. My favorite part of this post is that after a long description of his economic woes – which, by the way, represents only a fraction of the financial trouble he’s in – he makes a reference to the “new car” he just bought for 25K (or something like that). Further evidence that he’s learned nothing from any of this and hasn’t really changed his ways. As he’s admitted, one of the main reasons he got into such huge debt was his insistence on having the best and newest of everything. Rather than spending 7 or 8 grand on a used car, he drops three or four times that much on a brand new car – totally irresponsible, no matter how he tries to justify it. It’s decisions like this that make it clear he’ll never get out of this hole – his judgment is terrible.


    June 25, 2010 at 10:38

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