Here in the United States, the legislative bodies have passed laws preventing credit card companies from suddenly raising interest rates to loan shark levels if you are late with a payment. Credit card companies are suppose to give you 45 days notice before they raise your interest rate.
Here is a list of the rules credit card companies must abide by: What the Credit Card Bill of Rights Means for Consumers
I didn’t see anything about CUTTING credit limits – or canceling cards!
Trying to take care of all my bills before I left on my round the world trip, I decreased my credit debt to $0. Apparently I am now a credit risk to some companies because when I got back I used a Visa card issued by HSBC.
Staying on top of it, I decided to pay it off as soon as I charged the item and called for the mailing address. The automated system said I had $245 of available credit!
Wasn’t my credit limit $3000???
They lowered the limit to $300 from $3000 because of inactivity. Ok fine. But you never warned me and when I called to complain they said they sent a letter. Only the letter I saw was postmarked AFTER I made the complaining call.
What can you do? Not much from what I can see. If you have $0 balances try to use your card for small items and pay it off immediately. Credit card companies feel that if they are not making any money off the interest you owe them, you are a risk.
If you’re taking a trip, you should be proactive and call. Tell them you are traveling and not to lower your credit limit. Not sure if that will make a difference, but it can’t hurt.
Some cards are being canceled outright without any prior warning because of inactivity. How ridiculous is that?
You don’t want to be in a foreign country, think you can use your credit card and then have it denied because you are suddenly over the limit. Especially if the credit card is needed for a emergency situation. Bring two credit cards and hope that their respective credit limits don’t get cut or canceled at the same time!
Anyone else have any suggestions?? Would love to hear them.