Stop Your Credit Card Limit From Dropping

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. Slashing credit card limits is a common practice during economic hard times

. But cardholders' credit scores get hurt by it, through no fault of their own. To help your credit limit stay the exact same or get higher, you will find things you are able to do.

Everybody is having a credit card limit dropped

Credit card companies are cracking down on cardholders during the recession and its aftermath. Many credit card-issuing banks are trying to rein in risk amid increasing delinquencies and charge-offs — and before the final round of new credit card rules goes into effect. 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. Many individuals are having a difficult time borrowing money, even those with high credit score between 720 and 750.

Credit limits make credit scores drop

More than 60 million cardholders have had their credit limit slashed over the past few years. Credit Card Guide reports that numerous people hit by credit limit cuts haven't committed any of the typical "risk triggers" banks use to assess credit worthiness, like regular late payments or high credit card balances. Having your credit limit cut isn't really just an inconvenience for people. For cardholders with outstanding balances they can hurt credit scores as well. Credit line cuts aren't just a concern considering one of one of the most essential things in a credit score is debt-to-credit ratios.

Making certain you don't get your credit card limits cut

Eva Norlyk Smith at Credit Card Guide has some tips to help anybody who would like to increase or keep the same their credit limits. You are able to always call and ask. Most credit card accounts qualify for credit limit increases once a year. Each month, make paying off the balances a priority. Don't use more than 50 percent of the credit line, although you need to 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. Applying for more credit and a credit check are two really bad things to do.

Discover more info 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/