[lostinparadise]

Please help if you know the laws on this. This is regarding the practice of lowering credit limits to just under the balance on the day the finance charges are charged, without giving any notice, causing the account to be over-limit.

I contacted my CC's customer service department in July of 2007 regarding over-limit fees on my account. I had a $7,000 limit, as far as I knew, and was not expecting this fee. The agent told me that my limit had been lowered to $6,800 (my balance was $6,790.75.) on July 2. This was fine, except for the fact that, on that same day, they also charged the finance charges ($170.25), knowing this would put me over my new limit. I didn't receive the statement advising me they were lowering my limit "effective immediately" until July 5, three days later. By lowering my limit to just under what I owe on the same day they were to charge the finance fee, it caused me to incur the over-limit fee of $39.00. I contested that I was not responsible for a fee I had no way to protect myself against, considering the statement was sent out on the same day they conducted this matter. After speaking with a "supervisor", I was able to get the charge removed, but I have reservations about this business practice, and wonder if it borders on criminal offense. It happened to me again on February 1, 2008. They lowered my limit from $6,800 to $6,500, "effective immediately" when my balance was at $6,452. Had I made any charges between February 1 (when they sent the statement advising this) and February 4 (when I actually received the letter informing me of this), I would have incurred over-limit fees. I could not have known I would have been going over a new limit. I spoke with a customer service agent who told me they were supposed to give me at least a month notice that they are lowering my limit, yet she couldn't explain why I kept getting "effective immediately" statements. This also happened back on October 3, 2006, when my balance was lowered from $10,000 to $7,100. I will be looking at statements received over the last 10 years to see how many times this has occurred, as I don't recall it being mentioned in the agreement I signed with them and I can't believe it could be legal to not give customers notice of lowered limits. By the way, no charges have been made to this account in nearly a year, yet somehow I have ended up with at least 4 over-limit fees in that time. How can this be legal? They keep lowering my limit to validate over-limit fees when they charge the finance charges.

How can I find out the law on this, short of contacting a lawyer?

Also, is the credit card company required to send me a copy of the signed agreement I have with them upon my request, or do they actually have to be subpoenaed? A supervisor said the only way I could acquire this was with a subpoena to the legal department.

[Mr. Knowitall]

This may be in violation of your (undisclosed) state's consumer laws; consider making a complaint with your state's attorney general.

Credit card companies frequently mail "updates" to their terms of service. Most people throw them away without reading them. You may have "agreed" to these actions by ignoring such an update then continuing to use the card.

What is stopping you from closing out this card account and getting a new charge card?

[lostinparadise]

Thank you for your response. I will have to see what I can find. I keep everything they send me, even if I don't read it all. Still, lowering limits on the same day of charging the finance charge seems like a real scam, regardless of what they find within their legal limits. There is no way for a consumer to protect themselves against this type of practice. They can decide at anytime, "hey, let's collect an over-limit fee this month". Like I said, this card hasn't been used in almost a year, payments have been made every month and yet, there are 4 over-limit fees. It may be legal, but it's ethically wrong, and someone will be answering to God for it.

As far as paying it off, I desperately wish I could. Due to a job loss a couple years ago, it was used for a house tax payment and home insurance. I don't make enough money to ever have an extra $6,500 (short of saving for 6 years). I have just barely been able to make the minimum payments. Trust me, I would love to be done will this unscrupulous company. It's the only credit card I have ever owned and have only ever used it for emergencies. I will never own another.