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How to Protect Yourself as Lenders Lower Credit Limits

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


  1. 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.
  2. 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.
  3. 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.
  4. Get online alerts. Your issuer may offer a service that alerts you when you are nearing the limit on your credit card.
  5. Shop around. Don't cancel your card if your credit limit is reduced, but do shop around for more attractive offers.


Join The Conversation
supercoolnat supercoolnat 8 years
Funny, one of my credit cards just got the limit raised (they seem to do it automatically every once in a while). It's one that I don't use very often, but I keep it open just because it has such a high limit.
jmolea01 jmolea01 8 years
I have one credit card that I pay twice a month on time every time and this happened to me recently, probably bc of my student loan debt. Savvy, I'm taking your advice and shopping around because if the credit card company can't see a good customer (been with them for almost 10 years, never a late payment, low balance) when they see it, it's their loss.
ilanac13 ilanac13 8 years
i guess that i'm lucky about this one - i don't like credit cards and i don't have any for myself so this won't affect me. i have an Amex, but since i have to pay that off every month, i think that it helps me be more responsible about my spending habits.
bluepuppybites bluepuppybites 8 years
Why isn't their more effort to teach people to get rid of their credit all together. My husband and I have been doing this for years and we manage just fine. We are even able to buy a house.
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