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Is There a Credit Crunch ?

Written in 2009, when I was speaking with a friend and heard an interesting change to the normal story I hear about Credit Cards and Credit Limits.

Up, Up, Up (in a puff of smoke)

Typically Credit Cards raise your credit limits, if you pay your bills of quickly AND you put larger purchases on your cards (and pay them off, as I mentioned). I have noticed this many times, that my credit limit has been “bumped” without me even asking for the raise, I simply get a note from AmexMasterVisaClub Card which says, “Congratulations, you can get yourself into deeper debt now…” (or something like that I am paraphrasing).

What do You  Mean You Want to Lower Your Limit?

I heard a story from a friend who said that as part of one of their MBA courses, they were asked to get their banks to lower their Credit Card limits (good precaution if you have gone from High Flying Single with big income, to poor student again) as an exercise for a course. I believe this was to show just how hard a process this can be, but this may be changing.

Retired? No Credit For You Bub!

A friend who has been retired for about a year now got a note from his Credit Card stating that they had LOWERED his credit limit (without him asking, and without his authorization for that matter). No real explanation was given as to why the credit card company had taken this action, but I would assume they would have figured out that he is retired (just by his age alone, but may see by his credit reports too), and decided it might be prudent for them to lower his limit (in case he goes senile and spends too much money, I guess).

Has anyone else heard of this new type of “imposed belt tightening” by the Banks and Credit Card companies? Very interesting if this is becoming a regular policy (i.e. you are getting old, No Money For you! (to paraphrase the Seinfeldian Soup Nazi)).

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