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[Jan. 2009] Economy and line of credit question

Tia

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Hi all,

I have read previously about peoples equity lines being reduced in recent times. We got a letter saying Wells Fargo has decided ours has matured as of 4/20, so they are closing it after 13 years having it available. I have not dug out the original papers. Guess they can do what they want?

We have not used it much, but it was tied to our checking as a overdraft protection after they got rid of that product several years ago. It was costing us $0 unless we used it, it was 1 1/2 over prime if we did. So now suppose anything they have to replace it will cost us $$ :mad:
 

tlwmkw

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My understanding is that if you don't owe anything on your HELOC then it may get cancelled. We keep a little owing on ours in the hope that it won't get taken away. Friends of ours have also had theirs "taken back" they didn't have anything owing but wanted to keep it for emergencies. We did have a credit card that we seldom used that was cancelled by the bank.
 

davhu1

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Tia,

You may want to shop around. The line of credit we got a few years back is 1/2% below prime and had another one that was 1/4% below which we canceled.
 

NWL

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Try LeandingTree.com. It worked great for us. Legitimate banks responded. None were "fly-by-night" banks. Just remember the responses you get will be based on the bank and your credit rating. We ended up with Prime Rate minus 3/4%. We currently are taking advantage of a special deal they started in September: Prime minus 1.49% through July 2009.

Hope this helps!
 

gorevs9

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Hi all,

I have read previously about peoples equity lines being reduced in recent times. We got a letter saying Wells Fargo has decided ours has matured as of 4/20, so they are closing it after 13 years having it available. I have not dug out the original papers. Guess they can do what they want?
If you can find the original papers, it probably has statements indicating it can be cancelled at anytime OR it is reveiwed for renewal every X number of years.
 

Tia

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Thanks for everyones input. Basically this was overdraft protection for checking since they stopped offering it.

I dug out the original papers seeing the maturity date, and they say it could be renewed if Wells Fargo wanted to. So I called to ask, but to renew the gal said it's the new terms, costing more every which way. New quote interest rate 7+% minimum :rolleyes: , much higher than what we had considering prime is so low presently. Not to even mention what others have posted getting.

I didn't like any of the options they talked about to cover our checking incase of over draft...:annoyed: (I'm cheap )
 

NWL

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Thanks for everyones input. Basically this was overdraft protection for checking since they stopped offering it.

I dug out the original papers seeing the maturity date, and they say it could be renewed if Wells Fargo wanted to. So I called to ask, but to renew the gal said it's the new terms, costing more every which way. New quote interest rate 7+% minimum :rolleyes: , much higher than what we had considering prime is so low presently. Not to even mention what others have posted getting.

I didn't like any of the options they talked about to cover our checking incase of over draft...:annoyed: (I'm cheap )
I'm cheap too! :D It's works pretty good these days. Give Lendingtree.com a shot. You get a quick response and it will be an honest assessment of how the banks view you and your credit rating.

Cheers!
 

Hoc

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Several months ago (around October), I paid off a credit card, and then took it with me to Hilton Head to pay room and expense charges on a trip. That Saturday night, while I was staying at the hotel, Amex reduced my credit line from $15k to $500 on one card, reduced another card from $5,000 to $500, and reduced a third card from $12,000 to $9,000, thus maxing it out. There began my personal credit crunch, as I was on the road with no card to pay the charges to get me out of the hotel into which I had checked in, using the $15,000-now-$500-card.

Luckily, I was traveling with a friend, or I might have had issues.

Later, I paid the $9,000 card down by $3,000 so that I would have some decent spending room, and they reduced my credit line down to $6,000. So, now I'm hoarding cash and not paying off any cards (I used to pay off all my cards each month, then run them up, then pay them off the next month) because I might need that cash to live.

My friends' Chase HELOC was just reduced to the amount of their outstanding debt, along with most folks with Chase HELOCs. This is the current credit crunch in action.
 

Tia

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Hoc this is plain scary to me. When you say you used to pay off your credit cards monthly but changed that to hoarding cash, are you saying your not using your credit cards then? So not paying interest on balances right? Your past use of credit cards is what we currently still do, so curious. Wondering if we should reconsider....

Several months ago (around October), I paid off a credit card, and then took it with me to Hilton Head to pay room and expense charges on a trip. That Saturday night, while I was staying at the hotel, Amex reduced my credit line from $15k to $500 on one card, reduced another card from $5,000 to $500, and reduced a third card from $12,000 to $9,000, thus maxing it out. There began my personal credit crunch, as I was on the road with no card to pay the charges to get me out of the hotel into which I had checked in, using the $15,000-now-$500-card.

Luckily, I was traveling with a friend, or I might have had issues.

Later, I paid the $9,000 card down by $3,000 so that I would have some decent spending room, and they reduced my credit line down to $6,000. So, now I'm hoarding cash and not paying off any cards (I used to pay off all my cards each month, then run them up, then pay them off the next month) because I might need that cash to live.

My friends' Chase HELOC was just reduced to the amount of their outstanding debt, along with most folks with Chase HELOCs. This is the current credit crunch in action.
 

applegirl

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We have a Chase HELOC and our line was reduced to what we owe last May.
Guess we're all in the same boat!

Janna
 

Blondie

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I thought amex did not have a spending limit.:doh:
 

Hoc

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Hoc this is plain scary to me. When you say you used to pay off your credit cards monthly but changed that to hoarding cash, are you saying your not using your credit cards then? So not paying interest on balances right? Your past use of credit cards is what we currently still do, so curious. Wondering if we should reconsider....
I am paying interest on cc balances, because it is worth the 10 percent per year to me to have the extra cash on hand. If I get a windfall of some kind, I'll use that to pay down the cards. But I want to make sure I have enough cash on hand to pay 5 years' mortgage payment and living expenses, which is what I figure will get us through the entirety of the cash crunch.

Funny thing is that Citibank just increased my credit limit tonght by $10,000. But they charge 12 percent on their card.
 

bigrick

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Several months ago (around October), I paid off a credit card, and then took it with me to Hilton Head to pay room and expense charges on a trip. That Saturday night, while I was staying at the hotel, Amex reduced my credit line from $15k to $500 on one card, reduced another card from $5,000 to $500, and reduced a third card from $12,000 to $9,000, thus maxing it out. There began my personal credit crunch, as I was on the road with no card to pay the charges to get me out of the hotel into which I had checked in, using the $15,000-now-$500-card.

Luckily, I was traveling with a friend, or I might have had issues.
What a nightmare! And while you were traveling! At a time when you are most dependent on credit cards, your own cc company pinches you hard.

Two years ago, while we were in SF, our cc company called me on my cell to inform me that my cc numbers were being used across the country. The cc company would cancel my current card and send us new cards to our home (a 2 hour drive from SF thankfully).

My existing cc did not work after the call BUT my wife's card still worked! No need to rush home just yet. We used her card exclusively for 3 days. The next day my card worked again. Very odd! Two days after we were back home, our 2 new cc's arrived.
 

bigrick

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I visited my local US Bank branch this week. They are still offering HELOCs for prime-1.01% with a floor of 3.99% which is where mine is sitting right now. Generally speaking, this is the BEST HELOC I have seen.

Right now this floor is too high! I am instead using my other HELOC from National City bank which is at prime-0.5% with no floor, so it is at 2.75% currently. :banana: Who would've thought such a home loan rate was even possible? Maybe in the 19th century, but not in the 21st!

I still get offers for no fee, 0% balance transfers for 12 months, but they are few and far between now. The credit limits are at/under $15k which isn't bad. However, for me, it's just small enough that I am skipping the offer. If they'd only go to $30k or $40k ...

So for now, I have 85% of my mortgage on a Chase cc at 0% until Dec 2009 (so far, no shrinking of the limit) and 15% on the HELOC above at 2.75% (no shrinking of the limit).

If, as Hoc expects, the economy takes 5 years to work its way out of this cash crunch, and we do not have inflation, we'll all probably have nice low rates to work with for a couple more years. Now to figure out how best to use those low rates...

p.s. I have a friend who owns commercial property. He spent several weeks recently looking at refi options. The best he could get was 6%, fixed for 7 years, and then adjustable for 23 years.

The better rates are in the home loan market so shop, shop, shop around. Think of it as buying your second timeshare now that you've found TUG. :D
 

Steve NH

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.

Funny thing is that Citibank just increased my credit limit tonght by $10,000. But they charge 12 percent on their card.
That's because they figured out you are only paying the min. "Rack up that balance at 12% please"
 

pgnewarkboy

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Several months ago (around October), I paid off a credit card, and then took it with me to Hilton Head to pay room and expense charges on a trip. That Saturday night, while I was staying at the hotel, Amex reduced my credit line from $15k to $500 on one card, reduced another card from $5,000 to $500, and reduced a third card from $12,000 to $9,000, thus maxing it out. There began my personal credit crunch, as I was on the road with no card to pay the charges to get me out of the hotel into which I had checked in, using the $15,000-now-$500-card.

Luckily, I was traveling with a friend, or I might have had issues.

Later, I paid the $9,000 card down by $3,000 so that I would have some decent spending room, and they reduced my credit line down to $6,000. So, now I'm hoarding cash and not paying off any cards (I used to pay off all my cards each month, then run them up, then pay them off the next month) because I might need that cash to live.

My friends' Chase HELOC was just reduced to the amount of their outstanding debt, along with most folks with Chase HELOCs. This is the current credit crunch in action.
That is scary! I suggest you contact your representatives in Congress to let them know how well the banking bailout is working at loosening credit. Seriously.
 

RichM

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We have a Chase HELOC and our line was reduced to what we owe last May.
Guess we're all in the same boat!

Janna
Our Chase HELOC was also "suspended" sometime last year. We don't/didn't owe anything on it, though, and only had it for emergencies. I'm curious to see if that also means we don't have to pay the $20 annual fee that's normally due this month - so far no bill..

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Kal

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I have a very large HELOC with Bank America. It's only for emergency purposes and is currently untapped and at full value. I asked the Bank about it being eliminated or reduced and they had no answer..."that's a different department". The person said the best way to preserve the LOC was to consume the full balance and invest it elsewhere.

Wouldn't that be special!! For a long term, very low risk investment I get almost nil in return all the while the LOC has a variable rate. NOT!! Hey, if the Bank eliminates the HELOC that emergency safety net is gone. So be it.
 

1950bing

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Never sign anything that will charge prime plus !
You want below prime.:cheer:
 

jlwquilter

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I have a good sized HELOC with Chase. I did my re-fi with them maybe 6 months ago and got it then. Didn't use it at all. Prime minus 1/4% rate. They sold the mortgage to Wells Fargo 2 months ago. I couldn't care less except that the nearest Wells Fargo to me is like 1,500 miles away so no popping to the branch to pay on the last day possible.

Anyway, this thread made me wonder what happened with the HELOC. I called Chase a few days ago and my HELOC is alive and well per the rep. So I've just put a small balance on it, just in case it helps keep it alive. I have it for a safety net also. We have a rental house and in this market if we need to pay 2 mortgages for a few months, we'll need that safety net.

I really can't imagine that our credit profile is any better (and probably worse) than some of you who have had your HELOC closed, limited, etc. What gives do you think??
 

calgarygary

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That is scary! I suggest you contact your representatives in Congress to let them know how well the banking bailout is working at loosening credit. Seriously.
I'm not even an American but realize that a bill passed the beginning of October on such a major issue is not going to have immediate effect. Hoc said that the trip was several months ago maybe Oct. (possibly Sept?) so how is that relevant to Congress and the bailout package that was passed?
 

castleo

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Chase HELOC

:)

My Chase HELOC was frozen several months ago. So I have been paying a little more that the minimum and paying down the main loan which has a higher interest rate. The line of credit has an interest rate of prime minus 3/4!
 

Tia

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Getting ready to go on vacation to my ts so will work on what to do when I get back. Ya just never know when you might need it is why I felt comfortable having it. Oh and I did look at both our major credit cards and no adjustments to credit limits, whew.
 
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