Deal or no deal: A truce for anxious credit card companies
Contrary to popular belief, there is a way for credit card companies to better manage their risk without lowering responsible customers’ credit limits. In fact, the solution is quite simple and well within the means of credit card companies that are losing good customers due to bad policies.
Simply put, credit card companies can offer its responsible customers a reduction in purchasing capacity to a reasonable level and for a certain time period after which a review will take place. By doing this, companies can mitigate any immediate opportunities for increased debt while not harming a customer’s credit score.
This détente is certainly not the perfect solution and it leaves out details for brevity, but it gives both lender and borrower a “grace” period to adjust during a difficult time, preserves customers’ credit scores, and maintains the integrity of the credit rating system.
Would you take this deal? What ideas do you have?
Greetings! I’m Kevin D. Johnson, a business owner who has recently assumed the role of consumer advocate and internet activist. Atlanta, Georgia is my home.
Upon returning from my wonderful honeymoon in Jamaica in October 2008, I received what I thought was an ordinary American Express bill, but to my surprise it was a disappointing letter informing me that my credit line was reduced by about 65% for a highly suspicious and discriminatory reason. Considering my excellent credit score and pristine payment history, it just didn’t make sense. However, what does make sense are the unfair and insidious policies that I have uncovered when asking why. It is time to change them.
I created this web site to document and share my challenging journey to change what is wrong, unfair, and unjust in the credit card industry. The ultimate goal of this web site is to inform consumers of ways to stand up for themselves against treacherous business practices and to educate consumers about how to improve their credit. Finally, I hope to encourage a more open dialogue with credit card companies about their policies–good and bad.
I am proud to say that this blog's unyielding demand for change led to an important 
I think this is an acceptable compromise. Certainly it beats the alternative of having your credit limit dramatically reduced, and your credit score bashed without the prospect of some future review and possible reversion to a previous state. Right now, I'm doing what others seem to be doing, (e.g. closing accounts, transferring balances) when APRs go up, credit limits go down or both. This is more or less a stop gap measure, while the true solution is strong regulatory control of this part of the financial sector - a regulatory control that is strictly enforced. In retrospect, perhaps this is a good thing for me - after all, I get rid of some debt and lower my overall exposure to building more. The credit industry has concoted a lose-win scenario (they lose, we win), so their nearsighted approach will eventually make their situation more dire. Unfortunately they're bringing about exactly what the economy DOESN'T need right now - less credit/less spending power for the American people. What is truly shocking is how we all saw the economy start its descent, yet no one seemed to have any foresight as to how the shockwave would affect all sectors of our nation and cause unemployment to spike. This isn't rocket science and it isn't something that hasn't happened before. The economy is cyclical so why is any of this a surprise? Was no one minding the store? Oh wait, that was George W. Bush. I think I have my answer!!! :O)
Posted by: Robert | March 09, 2009 at 09:35 AM