I just read an article where a lot of credit card companies are lowering people's limits to near or below current balances to collect additional interest and fees. This also hurts your credit scores which affects just about everything.

Check smartmoney.com for the article.

sporty06

 

I just got the same news on a Visa and they raised the interest rate. Like that helps, I pay in full every month.

 

Go the same letter from Citibank a couple months ago. My interest rate more than doubled!! Do what I did. Call them quickly and tell them that you want to opt out and confirm it in writing. Opting out means that you'll keep your current rate until the card expires. There's nothing they can do about it.
If everyone does it, I'm pretty sure they will reconsider their policy.

 

Opting out also means the acct is closed too though. You do still pay min monthly payments and at the old rate, but you cannot ever use the card again either and when it expires they also will not issue a new one for that acct.

 

CC companies are wacked out right now. I have a card that I only use for business travel 2 or 3 times a year. As soon as I get home, I file expense reports and pay it off which can be upwards of $20k for a 3 week trip. They lowered my limit from $50k to $5k without giving a reason. Had the card for 11 years and canceled it. Went to open another one and they gave me $100k limit, go figure..............

 

pay cash or use a debit card

 

We use mostly Capital One and American Express. Pay in full every month.

Have received no such notices - still high limits. I have no idea what the interest rate is - irrelevant.

 

You're right, I can't use the card again but that's fine, other CC Companies are more than happy to offer 0% on purchases and balances transfers.

 

To the OP, as others have said, probably more of a bank/underwriter thing than a Geico thing. That said, prob a good idea to shop Geico's rates anyway, especially if you're no longer going to get discounts after cancelling their CC, I bet you find a better deal on the Ins. if you look hard enough...

Da Gump brings up a lot of interesting points, as do others. This shell game is so big it's hard for any one of us to get our heads around it. I've had cards before like hdstreetglide08 said, they wanted to jack me around on limits or rates, wouldn't make me a better deal on that particular card, but same company would offer me a better deal on a different card, makes no sense, but it is what it is sometimes.

I wouldn't be too quick to cancel some cards though, I would leave em open for awhile, for a couple reasons.

#1 Theoretically, a long standing account helps your credit score. If you cancel long standing, but uncooperative accounts, and replace them w/ brand new cooperative accounts, your credit score may suffer on the new unproven history of any currently open accounts.

#2 While they reduced your credit limit, showing a $0 balance on a long standing account still goes to reduce your overall debt to credit limit ratio, when spread across all of your accounts, so I would get the new cards in place for awhile, maybe a year or so at least, before cancelling the old cards.

This said assuming you realize that having too much available credit can be a negative, but also look at it like this, what's to say the new company won't do the same thing at some point, at least you'd have the extra $500 or whatever on the old card if needed in a pinch on a trip or something.

As for one comment about throwing away credit card related stuff, not to read too much into the intention of that post, but it reminds me, never throw anything away, shred it or burn it, fwiw.

 

This is a funny topic for me to see as soon as I got home today! I opened the mail I got from Capital one about ten min ago and to my suprise it is raising my rate from 6.9 % to 23%??? I have never been late and only have about 60-70 dollars on it. I will be paying this off tonight and looking for another CC. (just for the record, this is the only card I have and the balance was also lowered from 5,000 to 750.)