Cutting credit card limits without telling

A final round of new credit card rules designed to protect consumers goes into effect on Aug. 22. To make these new rules possible, banks and credit card companies are working to cut credit limits, rates and fees on all their cards. Since the economy is so bad right now, it makes sense that credit limits would be cut. But cardholders’ credit scores get hurt by it, through no fault of their own. But you will find steps credit card users can take if they want to preserve their current credit limits, or even boost their credit limits.

Everybody is having a credit card limit dropped

During the recession, most credit card companies are harder on their consumers. Before new credit card rules have to be upheld, banks who use credit cards are trying to pull in all of their risk. As outlined by Bankrate.com, even those with good credit scores are having difficulties with dropping credit card limits. Banks are trying to close as numerous credit lines as they can, explained Dennis C. Moroney, research director of bank cards at TowerGroup, to Bankrate. Even those with scores between 720 and 750 can’t get credit very effortlessly right now.

Credit scores drop with credit limit

Credit limit hurt for 60 million cardholders in just the few years past. Credit Card Guide reports that numerous individuals hit by credit limit cuts have not committed any of the typical “risk triggers” banks use to assess credit worthiness, such as regular late payments or high credit card balances. Having your credit limit cut isn’t really just an inconvenience for people. It also hurts many credit scores of cardholders who have had outstanding balances on their cards. Credit line cuts aren’t just a concern considering one of probably the most essential things in a credit score is debt-to-credit ratios.

Helping your credit card limits

Any person trying to keep their credit limits from going down or help their credit go up should listen to advice given at Credit Card Guide by Eva Norlyk Smith. You are able to always call and ask. Most credit card accounts qualify for credit limit increases once a year. Always pay down the balance in full each month. You should be using your credit card a lot, although you shouldn’t use more than 50 percent of the line of credit. Make sure you pay all of it off on time. Don’t cancel credit cards you already have, don’t get any new either, and don’t get a credit check through your credit card company. A credit check is just as bad as applying for a new card.

Find more information 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/