Consumers Feel the Next Crisis: It’s Credit Cards, October 29, 2008
Excerpted from http://tinyurl.com/67rxxl
After years of flooding Americans with credit card offers and sky-high
credit lines, lenders are sharply curtailing both….The pullback is affecting
even
creditworthy consumers….
Lenders are shunning consumers already in debt and cutting credit limits for
existing cardholders, especially those who live in areas ravaged by the
housing crisis or who work in troubled industries….
The result can be a lower credit score, which forces a borrower to pay
higher interest rates and makes it harder to obtain loans….
Even those with good credit ratings are not excepted. American Express,
which traditionally catered to more upscale cardholders, said it would be
increasing effective interest rates….
Mr. Barry said that, without any notice, American Express had reduced the
credit limit on his business and personal credit card at least four times in
the
last year, which he said had lowered his credit score. The moves have also
made it difficult for him to manage his payroll and budget, he said.
======================
(30% of FICO = credit balances / credit limits)
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