New CHASE tactic ! Pay off Credit Card & get account closed

[OHBOY]

HAS ANYBODY ELSE EXPERIENCED NEW CHASE TACTIC ???

Ha.. .. while trying to reduce her credit card debt my wife recently paid off one of her credit card balances with Chase in the amount of $ 1800.
Today she recieved a letter informing her that the account has been closed by the card holder based on the following reasons:

* Balance owed on revolving accts too high
* Balance too high compared to credit limit
* Number of accounts currently in use

As she has not opened any new accounts for a few years, she has not increased her balances on her remaining cards (!)
She called Chase and questioned them as to 'what's going on'.... The answer given was that she was 'late or overdrawn' on 'another account'. When she told them that the statement was untrue, she just heard the same.......
We had planned to use that very paid off card for incidentials from hereon foreward, and pay the balance off each month .......

My own experience with Chase has been that they raised my interest rate 150% on 2 accounts upon faithfully having made payments (which forced me into default, & stop making payments altogether...), but ......TO CLOSE AN ACCOUT AFTER PAYING IT OFF, makes no sense to me........

[Peeps]

I've got two Chase CCs that are both at zero-balances. In the past few months both of the cards have had their credit lines drastically reduced. I think I got the same letter as your wife! At least, the three reasons they listed were the same. But they were right... all those things were true for me. Anyway, they didn't close the accounts but they've cut the lines down so far and so fast that I wouldn't be surprised if they close them sometime in the future.

[discouraged]

They got their money out of you which is all they wanted. Well before I quit paying my cards the cc companies were lowering my line of credit and 1 adjusted my rate to a higher level. Didn't matter that I'd never missed a payment and, in fact, paid over the monthly charge.

These folks are ruthless and could care less about the consumer.

[helpme2010]

This helped lead me into BK. I had always counted on my home equity credit lines and my credit cards to hold me inbetween jobs. Well right before I was even fired, credit companies began freezing or lowering my credit lines. After losing my job, my home equity line of credit was frozen. My lifelines were starting to terminate. When I later negotiated lower payment plans with creditors, some agreed to allow me to pay a lower payoff amount but closed or locked my credit lines for this priviledge. e.g. I had a Kohls account which finally caved in to my demands to make a lower payment amount, but I was not allowed to use my credit line anymore.

The worst part was what I just mentioned, lowering my credit lines or freezing my credit lines before I ever missed a payment. Especially the home equity line of credit. Why the hell did I ever take out this home equity line of credit (to be used as my lifeline) if they could just block my access to it when I needed it the most.

[Flamingo]

You need to realize what is going on here....you probably have very high debt showing in credit reports (high balances close to limits on accounts, etc.), lots of open accounts with high balances, late or non-payments, etc. so if a creditor pulls your credit reports and sees what is going on, they can cut your credit limit or close your account because you are now high risk. If you read the paperwork that was given to you when you opened your credit cards, you will see that you agreed to the terms of them being able to close your account at any time for any reason. Chase did not close your account for paying it off...they closed it because you are now a high risk. Sometimes we are our own worst enemies and we try to blame someone else for the problem. With the number of people defaulting on loans and credit cards, creditors are being extremely careful as to monitoring card use and balances for higher risk card holders.

[shark66]

The tactic is actually quite old. Both HSBC and Citi had done this to us when the times were much better - or at least looked that way - in the financial industry some five and half years ago...

In my opinion, discouraged hit the nail on the had with his/hers response...

We are dealing with companies that have a tremendous amount of influence on the government while having less scruples than Shylock or Cosa Nostra...

[OHBOY]

[QUOTE=Flamingo;492204]You need to realize what is going on here....you probably have very high debt showing in credit reports (high balances close to limits on accounts, etc.), lots of open accounts with high balances, late or non-payments, etc. so if a creditor pulls your credit reports and sees what is going on, they can cut your credit limit or close your account because you are now high risk.
__________________________________________________ __________________________________________________ _____

Wife does have high limits, but never a late or non payment, ect.

LATEST DEVELPMENT: This evening upon encouraging my wife to call one more time and try to speak to a manager, she actually got through and somebody that LISTENED !!! (Miracles do happen ?)
The man answering the phone took down pertinant info and apparently ran another credit check. He asked her why she had so many credit cards, to which she told him that she 'does not know' (right.......), b-u-t 'on the positive side she is in the process of paying all of them down'.
He reinstated the account, and told her that the card would be reactivated withing 5 to 10 minutes, to ignore the letter that informed her that the account is closed, and to expect another letter confirming that the account is open. HALLALUJAH !!!!!

THANKS TO ALL FOR YOUR MUCH VALUED INPUT !

[woeisme]

ummm.. isn't having (and overusing) too much available credit what brings us here in the 1st place? if you are seriously considering BK, why are you trying to reopen lines of credit? actually, why pay this card off? wouldn't having the $1800 in cash have been just as valuable (and not cost you anything!) as having an $1800 credit limit? and to the poster complaining about the home equity line of credit being closed, isn't using your home equity like a piggy bank what got us into the foreclosure mess in this country? I did lots of screwed up financial things (cashing out retirement funds being my most egregious mistake ever!) before figuring out what I needed to do to start getting my act together, but if you are here, you should be realizing that having MORE access to credit is not helpful to your financial future. Flamingo is right, you are acting as your own worst enemy here, not the banks as the bad guys. Took me a long time to see that... was probably posting on here a few years ago if my mean old credit cards hadn't jacked my rates up, I could have avoided my BK, they were the jerks, etc, etc, but current perspective is wish they had done it sooner, given me the wake-up call I needed earlier!

[BrokeinMD]

Ugh...Chase....yes, very similar thing done to me, too. They dropped my credit line, increased my interest rate from 9 to 29% when I was current, and then told me I was high risk. Citi and BOA did the same thing, too. Well, yea, I guess I am paying minimum payment only with a jump like that, just because I carried balances on them all. The jump in interest rates was what lead to my financial downfall, or else I would have continued to pay them until they were done. So, yes, I had high balances, but they forced me to now give them nothing with their tactics. If I do the math, what I used them for, and the interest rates they charged me after I stopped using them and just paid them, they got more than their line they gave me, and then 2 or 3x more. I have no guilt at all about this company's debt going away from my life.

[shark66]

I did lots of screwed up financial things (cashing out retirement funds being my most egregious mistake ever!) before figuring out what I needed to do to start getting my act together, but if you are here, you should be realizing that having MORE access to credit is not helpful to your financial future. Flamingo is right, you are acting as your own worst enemy here, not the banks as the bad guys. Took me a long time to see that... was probably posting on here a few years ago if my mean old credit cards hadn't jacked my rates up, I could have avoided my BK, they were the jerks, etc, etc, but current perspective is wish they had done it sooner, given me the wake-up call I needed earlier!

The fact that you did what you did doesn't necessarily mean that everyone else on this board had behaved in the same way, and got into BK for the same reasons that you did...

That being said, the banks are not always the bad guys, but a lot of them have left people with no choice but to see them that way, by behaving in a certain manner...towards their own customers...

[OHBOY]

ummm.. isn't having (and overusing) too much available credit what brings us here in the 1st place? if you are seriously considering BK, why are you trying to reopen lines of credit? actually, why pay this card off? wouldn't having the $1800 in cash have been just as valuable (and not cost you anything!) as having an $1800 credit limit? and to the poster complaining about the home equity line of credit being closed, isn't using your home equity like a piggy bank what got us into the foreclosure mess in this country? I did lots of screwed up financial things (cashing out retirement funds being my most egregious mistake ever!) before figuring out what I needed to do to start getting my act together, but if you are here, you should be realizing that having MORE access to credit is not helpful to your financial future. Flamingo is right, you are acting as your own worst enemy here, not the banks as the bad guys. Took me a long time to see that... was probably posting on here a few years ago if my mean old credit cards hadn't jacked my rates up, I could have avoided my BK, they were the jerks, etc, etc, but current perspective is wish they had done it sooner, given me the wake-up call I needed earlier!

__________________________________________________ _____________________

with all due respect, but... before you go into a 'rant' please note that my original post lets everyone know that I am NOT TALKING ABOUT A CREDIT CARD ISSUED TO ME !

[JackBondLove]

Back in the day when I was robbing Peter to pay Paul and Mary, the typical strategy was for me to take out a low interest balance transfer and then right at the end of the term (when the bank expected the balance to rollover to the rack rate), I would pay it off, and then quickly use the same bank to do balance transfer at a low rate (using a high interest rate, but zero fee account to bridge the divide.) Well, when it came time for me to do it to Chase, to supposedly take advantage of super 2.99% deal, they dropped my available balance down to 0! I got them to reinstate it back to $10K (from the original $25K.)

The funny thing is that all told, I ended up defaulting on Chase for about $40K.

[woeisme]

Ohboy, sorry, didn't think I was ranting, just saying that it make no sense for a creditor to stop extending credit seems slightly skewed (yes, their timing is odd, but this might have happened even if she hadn't paid off the account and they were just doing a normal credit review). But my point was that I think the big problems are when they keep extending credit to people who are already in over their heads and keep giving them rope to hang themselves with, but that's just my perspective. And I also apologize for assuming that spouses finances are interchangeably linked, I guess because the BK the courts take into account the entire financial picture of the household, I don't think about "wife's" credit cards vs. "husband's" but really was posing a more general, not specific, observation. But you are right, I should have used the term "one" rather than "you" (although I read "We planned to use the card for incidentals", so not sure why my lack of clarification about the card being your wife's rather than yours upset you to the point of using all capital letters to correct me when you were using the term "we".

Shark66, I spoke of my personal financial missteps precisely because I didn't want ohboy or anyone else to think I was some holier-than-thou-never-makes-a-financial-mistake type (why would I be here if that was the case?), but rather to point out that credit can be a real hazard to many (although certainly not all) people and if one was in a bad financial situation, continuing to use credit lines is not necessarily the best solution. In fact I'm certain that everyone on here's situation is unique. I was simply responding to someone who stated that his wife was seeking to have a credit line reinstated despite other statements that she has a lot of credit cards with high limits already, which sounds like someone who is making one of the mistakes I made.

I don't disagree that bank decisions can be capricious and they behave in predatory manners. Chase doesn't care about customers, it cares about profit. That is how big business behaves. Will it surprise me if the bank who canceled ohboy's wife's card after it was paid off and rate-jacked his 2 cards 150% will at some point try to jerk them around again? Nope. Chase will make $ from every merchant (with the cost passed on to the customer) for every incidental charge that is made with the reinstated card, and will probably try to jack her interest rate, or if they pay it off on time every month, try to institute yearly fees, or any and all the other tricks they have at their disposal. My advice will be the same though, don't get in bed with snakes or you will eventually get bit. It took me too long to get off the credit-card merry-go-round, and I'll be paying for it for another 2 years before my CH 13 is complete, but that's just fine with me because I really learned some lessons through the process and maybe I should keep my mouth shut and let everyone figure it out for themselves through the school of hard knocks, but I can't seem to help myself, I have to keep saying "Credit is the devil! Stop using it!" Ok, now those two sentences were definitely a rant (if you could only hear me shouting them in my head!), but hopefully since it was a rant against credit cards it won't offend too much...

[discouraged]

When I look back on it, I was doing the '0%' and transferring monies from card to card - I got in over my head when my son married a person who's parents were wealthy and I was trying to keep up with the Jone's, so to speak. Then, when I SHOULD have declared bk, instead took a loan from my 403b to pay off one card and then, like an idiot, kept paying the others, with low balances, even after I became unemployed. Did not become smart until all the money was gone.

BUT - even during all this, before I started just paying off the balances (ah - wish I had that money now!), the cc's kept increasing my limit. One, I kept telling, no, I don't want an increase and they increased it anyway. Crazy!

Live and learn. The wonderful thing is that I have now lived without cc's for over 6 months and there is such a sense of freedom. There are things I think not only 2x - but 4x before buying, whereas before I wouldn't have thought twice. So, I say thank you to the cc companies for being jerks and showing me I can definetely live without you.

[Goteki45]

Yep, these companies only claim to care about their customers, when they have a Madison ave advertising agency portraying them as caring.