credit card problem

I have a credit card with People's Bank in which I am the primary card holder and my mom is an authorized user. They gave me a limit over $10,000. I do not use the card ever, but my mom uses it. She ran up a balance just over $9,000. She has made all the payments on it on time, always pays over the minimum on it, never had a late payment even once.

Any way, the other day they sent a letter saying they are cutting our limit in half down to $5,000. At first they said they wouldn't impose an over the limit fee. Then they sent a followup letter saying they would start charging us with an over the limit fee unless we sent them $4,400. Then they sent another letter saying they were jacking the interest rate up from an already ridiculous 19% to over 28%! They claim now they consider me overextended for credit and they won't take in account my mom's salary even though she is part of the account. Can they get away with this legally, and what are my options at this point?

[bigun]

Your problem may be the way the accounts that are in your name are being handled. Do you have late payments or bounced checks with other credit cards? CC companies sweep credit reports periodically and they must have seen something that alarmed them.
Call and ask for a supervisor. Explain the absurity of demanding $4400 on an account that has an excellent repayment history and really whine about 28%.Demand an explanation. Demand to see your credit report. But, I gotta tell you if you're under water on a lot of other debt you'll not have much luck. The best bet would be to see if Mom can qualify for a balance transfer to another card.

Originally posted by bigun
Your problem may be the way the accounts that are in your name are being handled. Do you have late payments or bounced checks with other credit cards? CC companies sweep credit reports periodically and they must have seen something that alarmed them.
Call and ask for a supervisor. Explain the absurity of demanding $4400 on an account that has an excellent repayment history and really whine about 28%.Demand an explanation. Demand to see your credit report. But, I gotta tell you if you're under water on a lot of other debt you'll not have much luck. The best bet would be to see if Mom can qualify for a balance transfer to another card.

Thanks for responding to my question.

I have never bounced a check in my life, and I'm not late on payments to any other credit cards. Only thing that I can think of that's changed in the last 6 months is I now have a mortgage in my name. My mom bought a house in my name to avoid any legal problems should anything happen to her so that I got sole possession of it (to avoid any potential problems with my stepfather putting in some claim to it). So I am considered the mortgage holder even though she actually pays the mortgage (she lives in the house). But would this be reason enough for such bank to cut a credit line they approved for me so drastically like that? There has to be some recourse against this bank in light of no evidence of delinquent payments.

[bigun]

That puts things in a different light. I can see them freezing the line of credit but not cutting it 50% if they see more debt than they think you shoud carry. One thing comes to mind. Have you checked your credit report for accuracy? Make sure you're not the victum of identity fraud.
Ask a supervisor exactly what they see that alarms them. By cutting your credit line and then charging a late fee plus 28% interset they are screaming get your account out of here.
Best of luck and let us know what happens.

[JETX]

And if nothing else works, you might consider transferring the balances over to one of those short-term low interest cards. Even with an overloaded credit limit, your good payment history would probably allow you to get one of them, at least to give you time to pay-down the balance.

BTW, was the card issuer Providian bank??? That 'jack up the interest' is one of their favorite scams. That is one of the many reasons that they are constantly in hot water with the FTC.

Originally posted by bigun
That puts things in a different light. I can see them freezing the line of credit but not cutting it 50% if they see more debt than they think you shoud carry. One thing comes to mind. Have you checked your credit report for accuracy? Make sure you're not the victum of identity fraud.
Ask a supervisor exactly what they see that alarms them. By cutting your credit line and then charging a late fee plus 28% interset they are screaming get your account out of here.
Best of luck and let us know what happens.

Well, I took your advice, called them back to ask for an explanation. All they would say is their decision is based on an Equifax report and them saying something about my debt being over 50% of the limit they granted me, or something like that. Not sure if I really understand why that gives them recourse to cut my limit in half and jack up my interest rate so much, said it seems like they are trying to put me into a situation where they want to make me delinquent. I also asked them to tell me specifically what is was in the report they saw that puts me as such a risk in their minds, and all they would say is you have to contact Equifax for a copy of your report.

Any way, I asked to speak to a supervisor and was given the same runaround. I really whined about 28%, I said I don't see justification given I've never been late once on a payment, and that that's a higher rate than most department stores charge in interest. I kept getting there's nothing I can do as a response, and I said I don't buy that. So I asked to speak to another supervisor and I was told they can't transfer me to anyone higher up. I asked why and they wouldn't give a reason. Then she said good day and disconnected me.

Oh, and BTW, I did ask to have my account cancelled so my mom couldn't use it again, because I refuse to let a scumbag company like People's Bank get any additional money from me other than what I owe on the account. So I was told by the first lady I talked to she would close it for me, but then the supervisor said she had no record of it, but that was because it was already closed out at the end of May. Oh, and just remembered, the supervisor did tell me I would not be charged the over the limit fee. Of course, they sent a letter afterwards saying they were, now they're not again. For some reason I still don't quite believe them .

We are going to contact a lawyer and see if there's any way to resolve the matter. But if nothing else, we may just take out a home equity loan to pay it off, or as a last resort look into getting another credit card to transfer the balance to. Anything has to have a lower interest rate of 28%. I just want these scumbags paid off as soon as possible to minimize what they get from us in my name.

Thanks for the responses, the advice helped in my mind even if I didn't get the action I desired---yet.

[bigun]

Mike,

I hope things work for you but I believe I would defintely pull that credit report.

i would report them to the attorney general office in your area and report them to the better business bureau.

[JETX]

And lets not forget the Federal Trade Commission. They are the ones that are more appropriate since this is an interstate issue.

They have an online complaint process at [url]http://www.ftc.gov[/url]