Living in California Bad for Your Credit?

Paul Smith says HSBC lowered his credit limit

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    NEWSLETTERS

    TK
    "I will call them up, I will cancel it, I will say a few words, and then I will never have a kind word for them again," Paul said.

    A San Diego man says he was told his credit limit was lowered in part because he lives in California.

    Paul Smith, 62, lives in Otay Mesa and has been a San Diego resident for the past 30 years. The maintenance man, who said he has 15 credit cards, received a letter last Friday about his General Motors credit card, which was issued through HSBC.

    "Based on information obtained by the credit reporting agency listed below," the letter read, according to Smith, "and due to the current economic environment, we have adjusted the credit limit on your GM credit card to $1,400."

    Smith said he contacted the listed agency, Equifax, later on Friday to find out why his limit was being adjusted. Smith said Equifax's credit report on him said his credit was lowered because he owed more than 51 percent of the credit limit on his GM card. The month before, Smith said, he owed $1,400 on the card, which had a $7,000 credit limit. His limit was lowered over the weekend to $1,400, according to Smith.

    "What that report showed was that my husband has a credit rating of 751, had never been late with any payment to any card, and had always paid more than the minimum amount," Smith's wife, Joella, wrote in an e-mail. "The only 'negative' thing on that report was that this credit card company lowered his credit limit."

    Paul said he called HSBC and spoke with a customer service representative who identified herself as Lisa, who "told me that the reason [his credit limit] was cut back was due in part to the financial situation in California. Also in Nevada, Florida and Arizona."

    Reached for a comment on the story, a spokeswoman for HSBC-North America sent an e-mail stating, "As standard business practice, HSBC's card business adjusts credit criteria based on economic, market and other factors."

    Paul said he plans to pay off the card.

    "I will call them up, I will cancel it, I will say a few words, and then I will never have a kind word for them again," Paul said.

    Paul said he had long-term plans, too: He said as soon as the market goes back, the expects he will retire to Tyler, Texas.