All of the talk today when it comes to the economy is the "frozen" credit market. $350,000,000,000 of money from our taxes hasn't seemingly done anything to slow down the foreclosure rates as U.S. banks are simply using the free government money to cover the butts while loaning to basically nobody.
I was told of a local "agent" who offered to put $1,500,000 down on a $3,000,000 home with a bank that he and his clients have over $30,000,000 in deposits with and a long standing relationship and he was rejected. He makes many millions of dollars per year and thankfully pulled a solid eight figures out of that small bank. Perhaps they will go out of business as they certainly deserve to suffer.
During my wedding, I got a Citibank American Airlines credit card as American and United are the two best airlines to fly on out of Los Angeles if you like to fly (upgrade) to First Class. I racked tens of thousands in spending which I responsibly paid down to a zero balance. Without notice my credit balance was dropped from $35,000 to $6,800. I asked Citi - a company I have a seven figure mortgage (man, I can't wait to pay that monster down/off) - to increase the limit as I just used 60k of the 90k miles I have in my American Airlines frequent flyer mile account and they plain refused. I told them of the business I send them for my mortgage and three different people up the food chain could care less. Like the agent above - I pulled my business and canceled the card on the spot. I don't care what it does to my FICO score. I can't do business with Citibank if that is how the treat a customer like me.
My good friends has one of those American Express "Black" or Centurion cards that supposedly have no limit. Guess what - they DO have a limit. His was $250,000 and he spends a TON on the card with his business for which he, of course, pays off in one month. AMEX dropped him to $120,000 which still seems high but when you are buying millions of dollars in parts from every corner of the world - its a major pain.
Both my buddy with the Black Card and I in the past week have had our zero balance home equity loans "frozen" by the bank that issued them citing a drop in home value. Both homes have more than four times the amount of the equity line in home equity on the worst day but seemingly everyone in Southern California are getting these cutbacks.
The moral of the story is no matter what your income, FICO score or borrowing power - do not forget what these greedy banks have done to the U.S. Economy and to you as a consumer. Punish them whenever possible by pulling your business and or paying off your debt. In the mean time, the people who spend the most in the economy are less and less able to spend anything because the banks are sitting on the free money they got from Congress specifically to free up their lending.
Wednesday, January 21, 2009
Even The Rich Can't Get Credit These Days
Posted by Jerry Del Colliano at 6:30 PM
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