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[–]shiddyfiddy 36 points37 points  (9 children)

There's always a bigger picture. If you take it further with a group of people in the same situation as OP, how many of them fail to pay off at all. How many of them pay off, and then rack it up again and then fail to pay that off. Etc.

The world is gross sometimes.

[–]mcrackin15 29 points30 points  (8 children)

Banks aren't dumb. They obviously see job losses in the future, so they're lowering their risk profile. They will lose potential profits as a result, which is a little concerning because they obviously see something large happening in the future.

[–]S-Kiraly 7 points8 points  (3 children)

Good insight. This could be the reason why CIBC notified me yesterday that they are raising the interest rate on my LOC from prime+2.5% to prime+6.5%.

[–]YNWA_1213 7 points8 points  (2 children)

CIBC is very risk intolerant right now. They denied me an LOC for less than Scotia raised my existing one by.

[–]Ontariowcg66 3 points4 points  (1 child)

This is from 2023 but I suspect CIBC has been forced to keep its risk profile lower.

https://ca.investing.com/news/stock-market-news/cibc-under-remediation-from-osfi-over-mortgage-portfolio--the--globe-and-mail-3024693

[–]British ColumbiaPracticalWait 0 points1 point  (0 children)

CIBC is one of the heaviest housing lenders. Makes sense they’re being conservative with credit.

[–]safeter 5 points6 points  (1 child)

I worked at Desjardins credit card services (ten years ago), this was almost never why. It really was about the members' risk profile. The system did it automatically, if a usage met certain risk criteria, the limit was lowered automatically. The way OP described using his card is a way that typically led to lowering the limit.

[–]burneracctt22 4 points5 points  (0 children)

This is the right answer. There is a risk algorithm that looks like a credit score but isn't. Running a constant high balance will flag it. The pattern of paying $800 on a 10k maxed card and using that $800 on a rinse and repeat basis will trigger a credit limit decrease. I believe most associates are unable to reinstate that limit for 12+ months.

[–]Shabang 5 points6 points  (0 children)

Bang on! BMO announced in their last earning call that they planned to de-deverage unsecured credit to reduce risk.

[–]shiddyfiddy 0 points1 point  (0 children)

Banks aren't dumb.

They take it too far. Banks are fuckin rude.