Personal Budget Training: Unscrupulous Business Practice

Tuesday, July 15, 2008

Unscrupulous Business Practice

Credit card companies are dropping your credit limits without notification, and this could affect your credit score.

Card companies are reducing borrowing limits for tens of thousands of consumers, which then can lead to lower credit scores.

Those consumers facing this predicament might not even know it until they apply for a loan and then get denied because their credit score has dropped.

Banks and other card lenders are trying to better protect themselves from more massive losses like those in sub prime mortgage market. As a result, they are looking for ways to reduce their exposure to cardholders more likely to default. That is why they are lowering credit limits, which means they are reducing the maximum amount of credit extended to an individual, along with boosting card interest rates and allowing fewer balance transfers.

Labels: Credit Cards