During the end of last year, many people (including citizens of good credit) noticed their credit limit being slashed. Now, experts believe that another wave is coming.
Remember the new regulation that Congress passed so everyone is supposedly better off? Well, credit card companies are scared now and will try to fix their balance sheet by further reducing risks. This means further credit limit cuts in the not too distant further. Furthermore, consumers will probably start to see higher fees, higher interest rates as well since card companies still want to make profits. Bad bad bad for customers.
So how can you reduce the chances that your credit limit (or credit card) will be cut? Here are a few suggestions:
- Keep Your Cards Active - Use all your available credit cards once in a while so companies believe they are still active and in use
- Don’t Run Your Cards Up to the Limit – Again, big purchases should be spread out to different cards
- Have Multiple Credit Lines Among Different Financial Institutions – Different companies will have different rules and strategies. If a company starts cutting credit limits, at least there’s a better chance to not be totally affected.
- Don’t Open Too Many Accounts Before You Apply for a Loan – Too many credit inquiries could hurt credit scores, a major barometer in loan assessment.
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