Reduction of Credit Card limit....

With the economy turning banks seem to be trying anything to take away as much credit back as possible. While their credit card rates have been increasing steadily, they want to stop giving credit to their "high risk" customers, practically anyone carrying a balance. Recently a lot of people are receiving letters notifying them of a reduction in their credit limit. Their primary reason is usually stated as " Balance owed on revolving accts too high" or Balance too high compared to credit limit. Actually every reduction seems to trigger another one since the balance is getting higher compared to your extended credit limit...

For those having guilty trips note that these reduction and even account closures for inactive credit cards are not necessarily affecting people with high balances. It is a ploy by the banking industry to limit exposure in the credit markets. That much about the 700 billion bailout compliments of the US taxpayer. Now they do not want to give credit to anyone...

A recent NY times articles discusses this new trend here