Consumers are intended to be protected better with the credit card rules being put into place 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. Many of the time when the economy is down so far, credit limits are cut like this. But cardholders’ credit scores get hurt by it, through no fault of their own. But there are steps credit card users can take if they want to preserve their current credit limits, or even boost their credit limits.
Everyone is having a credit card limit dropped
During the recession, most credit card companies have been 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. There are many people getting their good credit scores hurt because of slashed credit card limits, reports Bankrate.com. Banks are trying to close as credit lines as they can, explained Dennis C. Moroney, research director of bank cards at TowerGroup, to Bankrate. Many individuals are having a hard time borrowing money, even those with high credit score between 720 and 750.
Correlation between credit limits and credit scores
More than 60 million cardholders have had their credit limit slashed over the past few years. ”Risk trigger” are what they call things like regular late payments or high credit card balances, which Credit Card Guide explains some of these people having their limits cut haven’t even done. It isn’t just inconvenient to have your credit card limit cut. For cardholders with outstanding balances they can hurt credit scores also. .
Protecting your credit card limits
Eva Norlyk Smith at Credit Card Guide has some suggestions to help anyone who would like to increase or keep the very same their credit limits. Calling and asking is the first thing to do. A credit limit increase is available to most credit card accounts at least once a year. Always settle the balance in full every month. You should be using your credit card a lot, although you shouldn’t use more than 50 percent of the line of credit. Always send within the payment 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. Applying for more credit and a credit check are two really bad things to do.
Discover more details 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/
