August 22 is when new credit card rules can 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. Most of the time when the economy is down so far, credit limits are cut like this. Even though a consumer can do nothing about it, having a credit limit lowered like this hurts a person’s credit score. To help your credit limit stay the same or get higher, there are things you are able to do.
is having a credit card limit dropped
During the recession, most credit card companies are 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. You will find numerous individuals getting their good credit scores hurt because of slashed credit card limits, reports Bankrate.com. 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. Numerous people are having a hard time borrowing money, even those with high credit score between 720 and 750.
Credit limits make credit scores drop
Credit limit hurt for 60 million cardholders in just the few years past. ”Risk trigger” are what they call things like regular late payments or high credit card balances, which Credit Card Guide explains some of these individuals having their limits cut have not even done. It isn’t just inconvenient to have your credit card limit cut. For cardholders with outstanding balances they can hurt credit scores as well. Considering debt-to-credit ratios are an very important part of a credit score, this can be a much bigger deal to cut credit lines than many realize.
Making certain your credit card limits are protected
Eva Norlyk Smith at Credit Card Guide has some tricks to help anyone who would like to increase or keep the same their credit limits. You can always call and ask. Most credit card accounts are eligible for credit limit increases once a year. Your balances should be paid off every single 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 in 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. A credit check hurts a credit score as much as applying for a new credit card.
Further reading
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/
