As a followup to my earlier article about credit card issuers reducing credit limits, I wanted to highlight some emerging problems in the credit realm, along with some tips for protecting yourself.
Credit Card Issuers Reducing Limits
As I noted previously, card issuers have started reducing their customers’ limits as credit has become tighter. Here’s how to protect yourself:
- Keep a close eye on your mail for any notifications of a change in your limit.
- Login and check your account regularly. While issuers are supposed to provide you with prior notice of any changes, you can never be too careful.
- Save room under your limits for true emergencies. Better yet, build up an emergency fund so you don’t have to rely on credit in a pinch.
Credit Card Issuers Increasing Rates
As credit has dried up, issuers have also started charging more for it. Here’s what you can do to avoid overpaying:
- Keep a close eye on your mail for any notifications of rate changes.
- Pay down your balances, preferentially targeting the balance with the highest interest rate first.
- Move your balances to a lower rate card — ideally one with a 0% balance transfer offer.
Credit Card Issuers Tightening Standards
Given all of the recent problems with people failing to make good on their debt obligations, credit card issuers have also tightened their approval standards. Here’s what you can do to make sure you’re in a good position to get credit when you need it: