STYLETHREAD -- LET'S TALK SHOP!

XtinaStyles · Marc Jacobs

Anyone familiar with credit laws?

tri_sarah_tops · Marc Jacobs

I don't know anything specific about the laws but i don't think it's illegal. Amex has been doing this thing lately, and it happened to a friend of mine, where regardless of credit or payment history, they slash limits or close accounts sometimes just because someone used the card at a certain store. ie, "this guy must be a credit risk because he bought something at wal-mart, and people who shop at walmart are more likely to default on their payment." In these cases the people weren't notified either, they just went to use their card and it was declined.

There's information about it on the Consumerist blog, I think.

itsapinkthing · Coach

This is legal, most credit card companies operate this way. I forgot the specific name for it. A credit issuer can change your terms if you become risky with another lender. So if for example you are late on a payment with creditor A, creditor B may reduce you limit or even raise your APR. This is something that has been in sisussion with law makers to change but, right now, totally legal and very good information to know in these times.

kmd · Kate Spade

It's legal now, but new legislation was recently passed that will not allow this anymore- unforunately, I don't think it will go into effect until 2010 or 12, if I remember correctly, which is insane.

XtinaStyles · Marc Jacobs

URG - still frustrating. I guess this will further encourage me to pay everything down and build better credit!

Thanks.

jah · Dooney & Bourke

I know that this is frustrating for you and I am really not trying to offend you or anyone, but I think you should look at this as them doing you a favor - if you are missing student loan payments, you are identifying yourself to be a bigger credit risk. I don't know why you missed these payments (if you were busy and forgot to pay or if you didn't have the money), but if it was because you couldn't afford at the given time to make the payment, then it seems to me that it is reasonable a credit company would determine that increases your risk of defaulting on payment or delaying payment to them. At the end of the day, credit issuing is a business. This policy is a good way for banks to manage risk - and overall for the entire consumer community, it is a better practice than other means (increasing interest rates, etc.).

Just as an FYI and not to make you more upset, but one item you should consider and review (and perhaps a much bigger issue than the actual decline of purchases at Macy's) is what this decrease may have done to your credit score. I'm not sure if this is a co-branded card or a store card and what the original limit was relative to your overall extended credit, but the lowering may have had an impact. If it did impact your score, you can get tips on how to improve it. Suze Orman gives some great advice.

Suasoria · Chanel

I will add that you might want to check your credit score and see what's up with it. My mortgage company did a deal where I could sign up with a monitoring service for free, and I took advantage of it, but I think there are other resources where you can look up your status without hassle.