Economy

[helwen]

Credit Card Industry Cutting Credit

Possibly as much as $2 trillion U.S. in credit may be cut. Some folks are already experiencing having their limits lowered and/or interest rates raised. I read a month or so ago about one guy who closed his consulting business because they kept lowering his limit so he never had any amount available on his account, which he needed to pay for travel expenses.

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And apparently the second most common use for credit cards right now is buying food at McDonald's. Crazy, since with the interest on the card the meal becomes a lot more expensive than it would be with cash.

Comments

[harpnfiddle.livejournal.com]

I just got a letter from Citi that my card Terms are changing (inc interest rate and other charges) I rarely hold a balance, and in order to do that this coming month with the new dishwasher and the furnace repair, I am going to have to write a check from the Home Equity Line, which I am trying to pay off. Grrr. Rob Peter to pay Paul.

[helwen.livejournal.com]

Grr indeed! But you have to go with whichever is lower/more stable :(

[the1butterfly.livejournal.com]

Do they warn you before lowering your limits? I don't touch most of my credit cards, but the one I do use is near the top due to quitting job and not wanting to use all my savings when I need some for emergencies.

[helwen.livejournal.com]

Usually they send you a letter about the terms changing. Savings are good to have, but seriously consider paying down on cards, and also having fewer of them.

[the1butterfly.livejournal.com]

Normally I pay them in full, but I need to have cash in my accounts in case I don't make enough and have mortgage or other non-credit card bills to pay (and it doesn't help that subbing every single day wouldn't quite cover my bills). The other cards I just keep around to make my credit better- I only use one.