A final round of new credit card rules designed to protect consumers goes into effect on Aug. 22. The majority of the credit card companies and banks are cutting credit limits, fees and rates on their credit in order to help bring these new laws into place. The majority of the time when the economy is down so far, credit limits are cut like this. Credit scores are hurt for anybody who has this limit changed. You will find opportunities for individuals who want to either stop their credit limit from going down or even make it go up. Resource for this article – Keep your credit card limit from being slashed without warning by Personal Money Store.
Limits on credit cards going down a bit
Credit card companies are cracking down on cardholders during the recession and its aftermath. Before new credit card rules have to be upheld, banks who use credit cards are trying to pull in all of their risk. Bankrate.com reports that even cardholders with good credit scores are getting their credit card limits slashed. Research director of bank cards at TowerGroup, Dennis C. Moroney, explained to Bankrate that credit lines are being closed up at many banks. Even those with scores between 720 and 750 can’t get credit very easily right now.
Credit scores drop with credit limit
In just the last few years, over 60 million cardholders have had troubles with losing credit limits. According to Credit Card Guide, quite a couple of of these individuals having their credit limits cut down haven’t done anything like regular late payment or high credit card balances that are called “risk triggers”. Having your credit limit cut is not just an inconvenience for people. For cardholders with outstanding balances they can hurt credit scores also. With the debt-to-credit ratio weighing in second among the most important factors contributing to credit scores, credit line cuts are no small concern.
Helping your credit card limits
Eva Norlyk Smith at Credit Card Guide has some suggestions to help any person who would like to increase or keep the exact same their credit limits. Calling and asking is the first thing to do. Most credit card accounts qualify for credit limit increases once a year. Your balances should be paid off each single month. Don’t use more than 50 percent of the credit line, although you should use it a lot. Pay balances on time. Don’t ask credit card companies to pull your credit report, don’t get any new credit cards, and don’t cancel any cards. Applying for more credit and a credit check are two really bad things to do.
Further reading
Bankrate
bankrate.com/finance/credit-cards/credit-card-issuers-slash-credit-limits-1.aspx
Credit Card guide
creditcardguide.com/creditcards/credit-card-tips/higher-credit-limit-6-dos-donts-342/
