Make certain you know when your credit card limit is sliced

A final round of new credit card rules intended to protect consumers goes into effect on Aug. 22. Banks and credit card companies have been raising interest rates and fees and slashing credit limits in the run-up to the new credit card rules. Many of the time when the economy is down so far, credit limits are cut like this. But cardholders’ credit scores get hurt by it, through no fault of their own. You will find options for individuals who want to either stop their credit limit from going down or even make it go up. Source for this article – Keep your credit card limit from being slashed without warning by Personal Money Store.

Credit card limits all dropping

During the recession, most credit card companies are harder on their consumers. Many credit card-issuing banks are trying to rein in risk amid increasing delinquencies and charge-offs — and before the final round of new credit card rules goes into effect. There are many people getting their good credit scores hurt because of slashed credit card limits, reports Bankrate.com. Dennis C. Moroney, research director of bank cards at TowerGroup, told Bankrate that credit card companies are reducing credit lines and closing accounts. Numerous individuals are having a difficult time borrowing money, even those with high credit score between 720 and 750.

Credit limits make credit scores drop

In just the last few years, over 60 million cardholders have had issues with losing credit limits. Credit Card Guide reports that numerous individuals hit by credit limit cuts haven’t committed any of the typical “risk triggers” banks use to assess credit worthiness, like regular late payments or high credit card balances. Having your credit limit cut isn’t just an inconvenience for people. It also hurts numerous credit scores of cardholders who have had outstanding balances on their cards. Considering debt-to-credit ratios are an extremely significant part of a credit score, this can be a much bigger deal to cut credit lines than numerous realize.

Making sure you don’t get your credit card limits cut

Anyone trying to keep their credit limits from going down or help their credit go up should listen to advice given at Credit Card Guide by Eva Norlyk Smith. Calling and asking is the first thing to do. A credit limit increase is accessible to most credit card accounts at least once a year. Always settle the balance in full every month. You need to be using your credit card a lot, although you shouldn’t use more than 50 percent of the line of credit. Make certain you pay all of it off 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. A credit check hurts a credit score as much as applying for a new credit card.

Additional 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/