Have you noticed how you aren't getting as many junk mail letters with "pre-approved" credit card offers as you were just a year ago?
The credit card companies are feeling the financial pinch as they wrote off an estimated $21 billion in bad credit card loans in the first half of 2008. The forecasts estimate a loss of another $55 billion through 2009.
Not only are they reducing the amount of new offers they are mailing out they are also actively reducing credit card limits on existing lines. Have you received such a notice yet? If not, get ready, there is a good chance you will get one soon!
Here's the rub on this.........as the lenders reduce your credit card limits, if you are carrying a balance on it that will effectively raise the loan-to-credit limit ratio for those accounts. The current credit scoring models treat higher balance to limit ratios negatively on your score.
So, you might be doing fine, carrying some balances but paying your bills on time yet see your credit scores go lower.
In a time when credit scores are becoming even more important with saving you money this is just another example of how the collapse of the credit markets ripples out and hits you where you weren't expecting it!
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