A final round of new credit card rules intended to protect consumers goes into effect on Aug. 22. Banks and credit card companies are raising interest rates and fees and slashing credit limits within the run-up to the new credit card rules. Since the economy is so bad right now, it makes sense that credit limits would be cut. Credit scores are hurt for everyone who has this limit changed. To help your credit limit stay the same or get higher, there are things you can do.
Dropping credit card limits
During the recession, most credit card companies are harder on their consumers. Credit card-issuing banks are trying to get as little risk as possible before new credit card rules come into play. You will find numerous individuals getting their good credit scores hurt because of slashed credit card limits, reports Bankrate.com. Research director of bank cards at TowerGroup, Dennis C. Moroney, explained to Bankrate that credit lines are being closed up at many banks. Even those with scores between 720 and 750 can’t get credit very effortlessly right now.
Credit limit cuts hurt credit scores
Credit limit hurt for 60 million cardholders in just the few years past. According to Credit Card Guide, quite a couple of of these people having their credit limits cut down have not done anything like regular late payment or high credit card balances that are called “risk triggers”. Credit limit cuts aren’t just a major inconvenience. It really hurts credit scores when a cardholder has an outstanding balance also. With the debt-to-credit ratio weighing in second among probably the most significant factors contributing to credit scores, credit line cuts are no small concern.
How to protect your credit card limits
Eva Norlyk Smith at Credit Card Guide has some tricks to help anyone who would like to increase or keep the very same their credit limits. You can always call and ask. Once a year most credit card accounts can get a credit limit increase. Always pay down the balance in full every month. And use the credit card a lot, but don’t exceed 50 percent of the credit line. Pay balances 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. Applying for more credit and a credit check are two really bad things to do.
Find more info on this subject
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/
