You know that Visa in your wallet with the worn out strip? The issuing bank might reduce your card's limit one of these days and it may happen without warning. Companies have 30 days to notify customers of a change but often give notification after action has been taken, and the reductions can have a negative effect on customers' credit scores.
The actions prove that the loose credit of previous years is now tightening, and according to The New York Times banks that issue cards with big names like Visa, MasterCard, and American Express are aiming their limit reductions at customers living in areas suffering from the housing crisis, those who are self-employed with businesses in troubled industries, and customers that have large debts.
Aminaka Wilmont
Graham and Green
Ashish
My credit limit has always been way more than I would spend anyways, it wouldn't really affect me.
1Same here. But I wonder- say you have a $12,000 limit and you owe $11,000 on the card. Can they reduce your limit to $10,000 and charge you huge fees for being over your new limit?
2that's a good question - i wonder what they will do about that. i think that it makes sense though to drop limits. there was a time that companies were raising credit limits because of the equity that you had in your home, but now that it's not the case due to the housing bust, i think that people really do live beyond their means, and shouldn't do that anymore.
3I didn't even know they could drop your credit limit. Isn't that a bad business move? I always thought they didn't care how much debt you got into. I would be so pissed if my limit dropped and I needed it for something. UGH. Thanks for letting us know about this Savvy.
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