Tips for Avoiding Credit Limit Reductions
Many card holders are getting a nasty surprise these days: their credit limits aren’t what they used to be. Cards that were once considered a financial safety net might not be all that cushy anymore. The worst part is that these credit limit reductions can take card holders by surprise.
How can you keep from getting hit with the credit reduction whammy? First, always make timely payments - on everything. Credit card companies might penalize you with a reduced limit if you make even one late payment that causes a dip in your credit score. Also, keep a good debt-to-credit ratio on your existing accounts. If you go over your credit limit, you just might find that it gets smaller as your bills get larger.
Some people face falling credit limits through no fault of their own. Companies balk at extending high credit limits to customers who work in troubled industries, such as real estate or mortgage loan processing. And with upcoming legislation that will regulate the way credit card lenders can make changes to credit limits, some companies are hurrying to make changes now.
Protect yourself by being a good customer, making timely payments, watching your credit limit, and always reading the fine print when you sign up for any credit card.
