Consumer complaint received 2017-04-25
Company: DISCOVER BANK
State: RI
Product: Credit card or prepaid card
Sub-product: General-purpose credit card or charge card
Issue: Trouble using your card
Sub-issue: Credit card company won't increase or decrease your credit limit

Complaint:
HOW CREDIT LIMIT DECREASES ARE HANDLED : This is an abusive practice committed by most credit card companies that calls for government regulation. Discover Bank decided to decrease my credit limit to my current balance on  XXXX   XXXX , while I was on vacation. They sent a letter to my home, which takes days to arrive. They made no effort to email, text or call me - methods that would actually notify me in a timely manner. I continued to use my card, as I was unaware of the change in credit limit, and Discover continued to approve my purchases. I learned about the changed limit when my card was declined on  XXXX   XXXX , a stupid way to inform your customers but better than a letter mailed snail-mail to home - I wo n't get that until I finish my vacation. They listed my account as overdrawn, said when I called to complain that they  may h ave already reported my account as overdrawn to credit bureaus and the representative would n't do anything about that, and I am still subject to penalty APRs and harmful credit reports should they decide to do so at a later date.     Note that there is NO REASONABLE WAY to have avoided this, as  Discover  did nothing to contact me other than send me snail mail or wait for me to log into my account, which I do n't do every day. Additionally, I will have to pay the last 4 days of charges which are now listed as " overlimit '' amounts, essentially forcing me to use cash to cover these transactions I wanted covered on credit.     Needed regulation from CFPB :   1 ) Credit line decreases should require repeated attempts to contact the cardholder by all available means. Snail mail is not sufficient.
2 ) Any charges above the new limit which are approved after the new credit line is set should automatically raise the credit limit to the amount approved, rather than being considered " overlimit. '' 3 ) Any a  pproved charges within a time period after the change ( say, 1 month ) causing the balance to rise above the new limit but below the previous limit should not cause the account to be listed as overdrawn with any company or credit bureau, including the issuer.      Stretch goal : Credit card companies should not be able to drop credit limits without warning. People rely on their credit limits as available funds when planning their lives. They may be on vacation, expecting to use that amount for emergencies, or even to get home. Credit card companies should have to consider credit limits as already borrowed and thus should n't be able to drop limits without sufficient warning, say a full billing cycle. This allows people to plan and not be left high and dry with a sudden limit decrease. While credit card companies may howl that this will induce some people to max out their cards and expose the company to more risk,  which is true, this should be seen as a normal credit risk of issuing credit cards. Consider the money already loaned when a credit limit was originally approved.

Company response to consumer: Closed with explanation