I purchased a new IWC watch from the local AD in mid September and paid in-full using my credit card which I use for 99% of all my purchases (the purchase price was slightly under $30,000). Coincidentally, I also purchased a new top of the line Apple Mac computer, peripherals, and software shortly thereafter (approximately $6,000).
I always pay my monthly balance off in full via on-line bank transfer and the only reason I use this particular credit card (i.e., as opposed to a debit card) is because of the frequent flyer mileage benefits which, in conjunction with my work-related and personal travel, really pays off well both in terms of free trips and/or upgrades since the shortest flight I can take out of the state is about 2,500 miles (4,000 kilometers) since I live on an island.
This overcast Saturday morning I was checking my on-line statement to ensure that my payment went through when I discovered that the credit card company unilaterally cut my credit limit 75%!
I called the credit card company to inquire and they said that as a result of the large “jewelry” purchase, the computer determined that I now had a high “debt to income ratio” - never mind that I paid off the entire balance via electronic transfer and that I have no other debt other than living expenses.
The representative candidly offered that they have been receiving a lot of calls like mine during the past 60 days since they have instituted “new credit procedures.”
What a change...
Do you folks remember the “old days” when you would purchase a high ticket item and the credit card company would send you a letter shortly thereafter unilaterally increasing your credit limit?
Now you charge a high ticket item and pay it off in full and the credit card company decreases your credit limit? I’m sure this isn’t going to happen to everyone - so don’t stop buying IWC watches - but it happened to me (LOL).
Times are certainly changing and the luxury market is probably not even feeling the worst of it yet.
Tracy (Honolulu)
