Reasons for credit line reduction

You may be right: Bank of America's actions may not be legal under the Credit Card Accountability, Responsibility and Disclosure (CARD) Act. I encourage you to speak with an attorney in your state who specializes in consumer protection law.

Last week I got some email notifications from Bank of America, than later via mail as well, that 3 of my credit cards and a credit line has been reduced; altogether by more than 65%. All these accounts had only 12% of the credit line debt. At life long interest rate (very low), and never been late. My income didn't change, no delinquencies, and no fraud on my credit history. My mortgage is always paid on time, we own our house since the beginning of 2004. To me this action is NOT legal. In fact, it's intimidating and discriminating. Intimidating because with such reduction it immediately looks like the credit line is more than 50% used, which backfires on me, the consumer. Checking some ratio even a simple search for cheaper auto insurance and such makes the quotes higher. Discriminating, because families with kids (babies) are no longer good customers to the bank!? The only changes that happened to our family is that we no have 2 very young kids, but it never affected our responsibilities to our lenders. I think it's NOT legal on the Bank's behalf to change terms without a legitimate reason. It's not even in the fine print. I really think this would make a fine topic on the news. The banks got plenty of bail-out money to help consumers in trouble. This may be the banks' way of getting these funds back from those who are making every effort to not to be one of them.

If you mean, can you settle an amount owed on a line of credit if you offer the creditor a lump-sum? Sure, that's a possibility, especially if you are behind on payments and the account has gone to collections.

will it be possible to reduce the amount on a line of credit if I pay it off in one payment .talking to the bank directly.

That's the sad part about these credit card companies, they can do this sort of a thing and will not specify exactly what the reason was. One of the reasons might just be due to this down economy the bank is just playing it safe.

My bank reduced my credit line from $35,000 to $17,500. They said it was partially based on my credit report with Equifax. I pulled a credit report and I have no delinquencies and a credit score of 814. I rarely use my card and always pay the balance in full each month. Why would they reduce my credit line?

Unfortunately, buried in the fine print of their agreement, you will find that they only need to notify you by mail for the credit line reduction. I understand that $5400 reduction is over the top, but in all probability it is because of your credit line utilization, which is basically the total amount of revolving credit used as opposed to the available credit. Anything over 50% will make lenders weary to issue more credit. You have limited options as I am pretty sure they will not raise the credit limit until at least 6 months have passed. My only suggestion, in case you do not want to keep this account is that you payoff the amount and close the account.

I recently applied for an instant credit online with discover card and was approved. a few days later my card arrives and it states my credit line to be $6000. I called to activate a PIN # and on the telephone the automated customer service also said I had $6000 available. I used the card. I got a call verifying it was me, blah blah for security. A day later I log on to see how their online deal is set up. Online it says my credit is $600 and I am already over my credit limit!! I sent an email and they replied that they have sent me a letter to explain. I am very familiar with my credit report and in fact I pulled it today to verify nothing crazy has happened. My average score among all 3 reporting agencies is 716 with my only problem being the amount of credit I have and that is used. I have zero late payments. I find it outrageous that they would cut my credit back by $5400 without even notifying me in a more prompt manner than mail!?!? (but they can CALL me within hours of my first use of the card?!) Is that even legal? (of course it is, they can do whatever they want!) Can you advise?