Bank of America closed my account for no reason

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LKGG18
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Bank of America closed my account for no reason

Postby LKGG18 » Sun Jun 17, 2012 3:15 am

My credit score is 631 due to running high on my credit lines but they are below the 90% mark. I am 22 years old and was approved for an Alaska Airlines Visa Card from Bank of America. After one year of being with Bank of America, they closed my credit card account due to economic problems. I was always on time with my payments and my credit balance was way below the credit limit.

Is Bank of America really bent out of shape right now? They should of never closed my account in the first place. I did open up new lines of credit but they were never used because I am establishing credit right now. Why would they do that if I was always on time and never went over my credit limit? My score was appropriate to keep this card open. This was my best visa card to date with a good APR of 10%.

All I got in the mail was some stupid letter stating that they are going through some hard time and they went ahead and closed my account. They let me pay off my balance monthly. Can I request a reconsideration for this? I do have fraud alert added to my credit report due to insane amounts of inquiries.

Have you guys had this problem before where they close your account out of the blue after being a customer for one year? My credit report doesn't support this closure and my income is over 6k a month for my age (Married Income).

Very upset right now.


CC Deville
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Postby CC Deville » Sun Jun 17, 2012 6:42 pm

Most banks don't close an account "for no reason." Accounts can be closed due to inactivity, a declining credit score, high debt load or risky transactions like too many cash advances or purchases at precious metal websites. Banks and credit unions receive updated credit scores every month to three months including the score(s) and the reason(s) for the scores. If your score has recently declined significantly (631 is low-most prime banks like BofA want to see a 660+) or if they have detected that several new trades have been opened, they are going to close down an account that they see as a potential loss. So the possible reasons for your account closure: 1) 631 score; 2) 90% overall utilization and 3) "insane amounts of inquiries." These three items would scare almost any bank.

Did they just close it outright or did you call customer service for some reason? During the Great Recession (especially between 2008-2009) BofA was taking every contact opportunity with a cardholder to process an on-the-spot account review. If they saw something they didn't like they shut down the account(s). There was a lady either here or at another forum that stated that she called BofA for a replacement card as her current one was worn out. BofA reviewed her account and closed the account just like that.

It is not just BofA either; Chase, Citibank and of course, Amex were shutting down accounts or reducing credit lines. Barclay's is notorious for closing new accounts if the cardholder opens several new trade lines after they are approved for a Barclay's.

I am not trying to be snarky when I say this, but credit is a privilege not a right. Try not to take BofA's decision personally; it was just business. When your score improves you can easily get approved for other cards and it will be your right and choice to give your business to another bank.

DavidNY
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Postby DavidNY » Sun Jun 17, 2012 8:07 pm

I've had credit with BofA for many years, never had an account review nor a credit line cut.

MemberSince99
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Postby MemberSince99 » Sun Jun 17, 2012 8:27 pm

I've heard stories that they are still looking to cut ties with what they view as "marginal" customers.

LKGG18
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Postby LKGG18 » Mon Jun 18, 2012 4:51 am

CC Deville wrote:Most banks don't close an account "for no reason." Accounts can be closed due to inactivity, a declining credit score, high debt load or risky transactions like too many cash advances or purchases at precious metal websites.


You got valid points though and will go by each one.

I called up my account specialist who did the review of my account and all he stated was that they closed my account due to reasons noted in the letter. In about 3 days after this call, I got the letter in the mail. The letter stated that they were doing yearly reviews on peoples accounts and their current credit worthiness. I was one of them that got hit and stated right in this letter they sent me "Due to hard economic times and current situation with the Economy, we are going to close your account." I tried to ask the guy over the phone what the heck do they mean? I even saw my credit scores they gave me on the letter which is around 651 from Experian. I swear they have a different scoring system since my score is higher then 651.

My Credit Utilization right now when they closed that was around 40%. I have other cards including Chase, Amex Green Card, Chase Amazon Visa, and my long term Visa Card from my Credit Union. I pulled my Fico scores from MyFico and my Experian and they have stayed in these ranges:

Exp: 671
Trans: 649
Equifax: 685

I am at a appropriate score range to utilize my current credit lines and easily pay them off. I just payed off my balance on this card.

The guy over the phone couldn't come up with a good answer to why because I told him that my credit score is good, my credit inquiries are up due to establishing credit and my credit to debt ratio is at a comfortable 40% during that time. Now its down below 10%. Very upset about this because on top of this, my chase cards had auto credit limit increases by 3k each (7k Chase Freedom, 7k Chase Amazon).

Overall a mystery to me and I understand credit is a privilege. Oh well a customer loss for them I guess,.

SteveT
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Postby SteveT » Mon Jun 18, 2012 7:01 pm

LKGG18 wrote:Overall a mystery to me and I understand credit is a privilege. Oh well a customer loss for them I guess,.


I completely understand how you feel. This has happened to alot of folks for a variety of reasons and the most frustrating part about this is that the banks wont give you a straight answer.

Bank of America is having problems. They have sold part of their credit card portfolio to raise capital and reevaluating their credit portfolio's credit quality by closing out accounts for various reasons.

My recommendation is to check your credit and credit score from all three CRA. If everything is ok I would write Bank of America and request the accounts to be restored.

CC Deville
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Postby CC Deville » Mon Jun 18, 2012 7:20 pm

LKGG18 wrote:
Overall a mystery to me and I understand credit is a privilege. Oh well a customer loss for them I guess,.


The banks are crazy for sure. Back at the beginning of 2010 I received a letter from Citibank regarding my Dividend card. They stated that " after a recent review of your account" they "noticed that I was not utilizing my full credit line and therefore felt it necessary to lower the credit line...." At the time I had a 790-800 FICO score and 4% utilization. I used my Dividend for everything, spending $1K a month and PIF. I should mention that I have two other Citibank accounts that I NEVER use and neither of them were touched; in fact they actually gave me an auto CLI 7 months later on one of my other accounts. The only thing I can figure is that they didn't like the fact that I started shopping at Walmart on a weekley basis (for groceries). Or, they were randomly choosing accounts and the one card that I used most got picked. I, like you, was pretty upset. But after awhile I figured that they were full of it and I wasn't going to take it too personally. I have to admit I would have been more upset if the account was closed, but similar situation.

You have the right attitude though...give your business to another bank that deserves it.

DavidNY
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Postby DavidNY » Mon Jun 18, 2012 10:07 pm

CC, did you take a BT from that Citi account? Since Citi is known for their nice BT offers, I'm wondering if they're hunting down those who eat up their CL with a BT and pay it off slowly.

Chase raised the minimum due for those who used their CLs for big, low APR BTs. My CL wasn't lowered, but a lot of people who couldn't afford the jump from a 2% to a 5% minimum lost their CC accounts completely, effectively lowering their CLs to zero. (Chase offered a program that kept the lower minimum, but the account would be closed after it was paid off.)

MemberSince99
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Postby MemberSince99 » Tue Jun 19, 2012 5:57 am

They may be crazy but they are crazy like a fox. They know what they are doing, they want to first limit their exposure and second limit their risk. They do it by cutting credit limits and closing down people with lower scores who carry high balances on their cards.

CC for you that is bizarre, I guess do you really want to deal with a bank that worries about where you buy your groceries? If everything else is good, what the hell do they even care? It's WAY too "Big Brother" for me when they start snooping into that. I would drop THEM.

And last but not least they can always fly into DC on their shiny corporate jets and get another bailout at our expense if worse comes to worse.....

CC Deville
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Postby CC Deville » Tue Jun 19, 2012 7:33 pm

DavidNY wrote:CC, did you take a BT from that Citi account? Since Citi is known for their nice BT offers, I'm wondering if they're hunting down those who eat up their CL with a BT and pay it off slowly.


Nope. No balance transfer. I used it for my everyday living expenses: gas, groceries, utilities etc. PIF every month. I have no idea what prompted the CLD. Especially since they didn't touch my Visa and AT&T MasterCard.



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