Western Banks Reducing / Cancelling Credit Lines

[ballzafire]

Had this happen to me with two of my accts now: Bank of America sharply reduced and raised rates, Chase outright cancelled (due to inactivity).

And I had been a long-time customer in good standing with each and had never missed a payment.

Yeah, that's it...Penalize and piss off your best-paying customers. What a way to run a business!

Grrr!!

[flying]

It has not happened to me personally but it has to a few folks I know.

These folks like you were not behind or a bad risk.

Also many report changes in terms as you mentioned with BOA

[ballzafire]

Personally, I would love to get started with Bangkok Bank but it appears the obstacles are too great unless one has a work permit.

Has anyone successfully opened an acct with them without a work permit? Tell us how you did it.

[gotlost]

Personally, I would love to get started with Bangkok Bank but it appears the obstacles are too great unless one has a work permit.

Has anyone successfully opened an acct with them without a work permit? Tell us how you did it.

Sure no problem. If your on a Retirement or Marriage Extension. And if one of their branches turn you down just go to another. Bank of America in my book has always sucked. but the problem of the OP is not just with these two banks they are all going this route because of the new laws be imposed on them to straighten up.

[ballzafire]

Personally, I would love to get started with Bangkok Bank but it appears the obstacles are too great unless one has a work permit. Has anyone successfully opened an acct with them without a work permit? Tell us how you did it.

Sure no problem. If your on a Retirement or Marriage Extension. And if one of their branches turn you down just go to another. Bank of America in my book has always sucked. but the problem of the OP is not just with these two banks they are all going this route because of the new laws be imposed on them to straighten up.

OK, thanks.

In referencing new accts for foreigners, I found this info page (you can see what a hassle it is for non-residents / tourists who don't fall under the first three categories):

http://www.bangkokbank.com/Bangkok%20Bank/...Accounts.aspx#1

Edited November 25, 2009 by ballzafire

[endure]

If you simply want to open a savings account all you need to do is pitch up with your passport and the cash. I've done it 3 times whilst here as a tourist. If you want current accounts that's probably a different matter.

[fletchsmile]

You'll find it's not just Western banks. I had the same happen to me with UOB Thailand, as I rarely if ever used my credit card with them. To be honest I think it's fair enough. To explain why:

Bank's need to set aside capital for any credit lines they extend, even unused ones. So if you have a credit card you never use:

1) That costs the bank money as there is a cost to them for any capital set aside

2) Someone else who has a need for that credit may be unable to get a credit facilty because the bank has restrictions internally and externally on what it can do with its capital, and how much is available.

One could argue that because you have a credit card you never use, you're actually one reason why some people can't get credit. Capital and credit is limited and there is only so much to go around. Why give it to people who never use it?:

1) It costs the bank money and they will inevitably try and pass that cost on: either they go bankrupt by losing money, or they pass it on to other cutsomers

2) That's not really fair on those who want credit but can't get it. Bit like having 100 car parking spaces for 150 car owners. Not enough to go around. What would you say to the guy who never drives a car, but insists on having his own parking space, which remains empty while 50 other people have nowhere to park their car? Similarly if you have a 1mio credit limit but only ever use 1,000, why not cut it so other people can benefit.

Use it or lose it. Fairest all round really.

[phetaroi]

If you were an inactive customer, you were not a good customer.

[khunjake]

If you were an inactive customer, you were not a good customer.

Especially if the bank didn't make any $$ in interest charges from you.

Do the banks just issue these cards to benefit consumers with their good will?

[ballzafire]

For the record, let me just say that I've had both these particular credit lines for about 18 years. I have used both often, have carried hefty balances at times, and have definitely helped the banks make money.

So, I don't appreciate this "you're not a good customer" bullcrap. That's an erroneous and unfair assumption.

Now, rather than award me with being able to continue to tap the credit on an as-needed basis, it is suddenly being either truncated or pulled outright. NOT a nice way of saying "Thank you for all your business over the years, good customer."

And I just read that this is now happening to millions of people, many of whom have good credit. Their explanation is that they want to "reduce their risk". What about the risk of losing your best customers?

They want to shoot themselves in the foot? Fine. Go right ahead...

[Jonathanpattaya]

Because of security and anti-fraud rules, if you do not use your credit card you will lose it.

[flying]

The only problem possibly with this type of behavior is.....

The way it was explained to me, when a bank cancels a card for non use or what ever reason

they do not list the reason. Your credit score takes a hit because all they see is your total

credit limit has been reduced.

I am not sure if this is true as I said it was told to me & I never looked

further. I have not had any canceled on me. Although they should as I have so many high limit cards & don't use them.

I cycle between two cards for business as it affords me a record at the end of the year. But I do not use revolving credit &

pay in full each month. So their not making any money off me. I guess they survive on a merchant charge ...2%?

It would be interesting for someone who knows their credit card to see if after such an event if their credit scores does go down...or not.

[Chaimai]

Because of security and anti-fraud rules, if you do not use your credit card you will lose it.

Not true.

Only when there is a "Financial Crisis" will the lemming banks mobilise their credit departments to undertake a "limit reduction programme" to reduce potential exposure and therefore risk.

It is the reverse of what they normally do in 'good times' i.e. increase in your card limit without approaching you.

There is a certain logical to reducing exposure although it is not usually done in a considered, risk-assessed way - it is usually totally arbitrary.

[Chaimai]

For the record, let me just say that I've had both these particular credit lines for about 18 years. I have used both often, have carried hefty balances at times, and have definitely helped the banks make money.

So, I don't appreciate this "you're not a good customer" bullcrap. That's an erroneous and unfair assumption.

Now, rather than award me with being able to continue to tap the credit on an as-needed basis, it is suddenly being either truncated or pulled outright. NOT a nice way of saying "Thank you for all your business over the years, good customer."

And I just read that this is now happening to millions of people, many of whom have good credit. Their explanation is that they want to "reduce their risk". What about the risk of losing your best customers?

They want to shoot themselves in the foot? Fine. Go right ahead...

The Western banks' policy of managing down exposure in certain risk areas is not helping recovery.

I had RBS welch on a GBP 1.4m loan offer where that had already issued 'indicative terms' - they eventually offered GBP 1m which was totally inappropriate for the project. I later realised that this was at the time when they almost 'went bust'.

More recently they declined a building proposal that met their Lending Guidelines in every respect AND they lend money for the original land purchase some 12 months earlier !

Edited November 26, 2009 by Chaimai

[Thanyaburi Mac]

The only problem possibly with this type of behavior is.....

The way it was explained to me, when a bank cancels a card for non use or what ever reason

they do not list the reason. Your credit score takes a hit because all they see is your total

credit limit has been reduced.

I am not sure if this is true as I said it was told to me & I never looked

further. I have not had any canceled on me. Although they should as I have so many high limit cards & don't use them.

I cycle between two cards for business as it affords me a record at the end of the year. But I do not use revolving credit &

pay in full each month. So their not making any money off me. I guess they survive on a merchant charge ...2%?

It would be interesting for someone who knows their credit card to see if after such an event if their credit scores does go down...or not.

"Too many" cards can also work the other way, to lessen your credit rating. To a potential loaner it just might indicate that you have too much exposure to credit.

Mac

[sbk]

My sister has had two credit cards cancelled when she used them to make a large charge, and this was not after a long period of inactivity. So, don't use it and loose it, use it and loose it.

[Pakboong]

[

Edited November 27, 2009 by Pakboong

[dkstoney]

We're all better off without credit cards. It's the credit industry that has ruined the economy.

All it is is an excuse for the Federal Reserve to print more money (worthless paper) at interest thereby creating more debt to the taxpayers. A credit card is the same thing. People put their money in bank accounts and accept paltry interest rates, while the bank turns around and uses the deposits to collateralize loans from which they earn a significantly greater amount of interest. All the while they are nickle and diming you for every surcharge and fee they can think of. That's the gratitude of the banking system to their customers upon whom they rely to continue the game.

[Kf6vci]

I hear you. A friend who consistently makes ~ $ 150 k p.a. in CA had her WAMU (now CHASE) HELOC cut from $ XXX k to 0.

Just a phone call. And she has many rental properties etc. and must me in the group of the top 3% credit wise.

But the use it or lose it post above is excellent - let your credit company make a bit, even

if you can afford to pay off the balance every month.

Unused cards with high balances are costly and banks are reducing their exposure these days.

Lots of folks with good credit cannot buy rentals with 20% any more.

The fundamentals are changing - hold on to th ecredit you got!

Chris

[flying]

I hear you. A friend who consistently makes ~ $ 150 k p.a. in CA had her WAMU (now CHASE) HELOC cut from $ XXX k to 0.

Just a phone call. And she has many rental properties etc. and must me in the group of the top 3% credit wise.

But the use it or lose it post above is excellent - let your credit company make a bit, even

if you can afford to pay off the balance every month.

Unused cards with high balances are costly and banks are reducing their exposure these days.

Lots of folks with good credit cannot buy rentals with 20% any more.

The fundamentals are changing - hold on to th ecredit you got!

Chris

In the US it is proving to be much better staying with Credit Unions

They have not closed any HELOC's here nor have they stopped lending...doing re-fi's etc.

But they are very cautious & know what they are lending for & to whom.

[endure]

If you were an inactive customer, you were not a good customer.

Especially if the bank didn't make any $$ in interest charges from you.

They still make money on merchant charges every time you buy whether you pay any interest or not.