Back in June, I mentioned that lenders were beginning to reduce credit card limits, especially for customers living in areas suffering from the housing crisis, those who are self-employed with businesses in troubled industries, and customers that have large debts. The effects of loose credit became even more evident over the turbulent Summer, and now consumers with good credit are also seeing their credit card limits cut.
According to Carol Kaplan, spokeswoman for the American Bankers Association, "Most banks are cutting their credit limits. They're doing it to everyone." The Wall Street Journal suggests five tips for protecting yourself as this new lower-limit trend spreads. See what they are when you
- Lower your debt. A bigger balance will draw attention from credit card companies and they may lower your limit if they fear your debt load is too large.
- Watch the mail. Keep an eye out for notification that your limit has been lowered, and check your monthly online or paper statements for changes.
- Check your report. Credit card companies will review customer credit reports for any red flags that indicate the borrower is risky, so be sure to keep tabs on your report and alert all three credit bureaus if you find any errors.
- Get online alerts. Your issuer may offer a service that alerts you when you are nearing the limit on your credit card.
- Shop around. Don't cancel your card if your credit limit is reduced, but do shop around for more attractive offers.