As if the troubled housing areas did not need any additional pressure from unexpected bank practices, here is this story about what they are doing with Credit card Lines of Crredit now.
“Banks that issue cards like Visa and MasterCard, as well as the American Express Company, are cutting the limits for customers who have run up big debts, live in areas that have been hit hard by the housing crisis or work for themselves in troubled industries.
The reductions come as consumers, squeezed by a slack economy, a weak housing market and rising unemployment, are falling behind on monthly credit card payments in growing numbers.”
We have been warning people for some time that the lenders have been shutting off access to open Home Equity Lines of Credit. Without warning, lenders have been targeting the areas where home values have been dropping and simply freezing the lines of credit. Customers received no warning, simply a letter informing them of no further access on the line of credit.
Now they are targeting the same areas, but reducing credit lines on credit cards as well. If you use credit cards to manage your regular bills, keep a close eye on this. It takes years to establish good credit. But 30 days to set you back sometimes. Getting your monthly bills interrupted and late payments showing up on credit cards which you are suddenly at your new lowered limit will certainly pressure your FICO score.
Tags: linesof credit, real estate, loans
