August 22 is when new credit card rules could be put into place. To make these new rules possible, banks and credit card companies have been 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 you will find steps credit card users can take if they want to preserve their current credit limits, or even boost their credit limits.
Credit card limits slashed across the board
During the recession, most credit card companies are harder on their consumers. . There are many 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 easily right now.
Correlation between credit limits and credit scores
In just the last few years, over 60 million cardholders have had problems with losing credit limits. ”Risk trigger” are what they call things like regular late payments or high credit card balances, which Credit Card Guide explains some of these having their limits cut have not even done. Credit limit cuts aren’t just a major inconvenience. It really hurts credit scores when a cardholder has an outstanding balance also. Credit line cuts aren’t just a concern considering one of the most significant things in a credit score is debt-to-credit ratios.
How to protect 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 exact same their credit limits. You can always call and ask. A credit limit increase is accessible to most credit card accounts at least once a year. Your balances should be paid off every single month. Don’t use more than 50 percent of the credit line, although you should use it a lot. Pay balances 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.
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/
