Detroit News: Credit card companies are lowering available credit, raising fees

[marmar]

Credit card companies are lowering available credit, raising fees
Credit card companies are mounting a sneak attack, taking a bite out of your wallet

Brian J. O'Connor / The Detroit News


It's the theme music from Jaws -- and it's coming from inside your wallet!

Duh-duh duh-duh duh-duh-duh-duh-duh-duhduh-duhduh-duh-- aaagh!

Credit card companies are circling in the water, chewing through your cash by raising interest rates, adding fees and chomping down on credit limits.

With bank profits declining and loan defaults rising, card issuers are trying to guard against losses and protect their revenue by abruptly changing the terms of your accounts. Experts predict that card issuers will cut customer credit limits by $2 trillion this year, and rake in $1.5 billion more in fee income than they did just last year.

"Financial institutions are hurting," said Bill Hardekopf, CEO of the consumer Web site LowCards.com. "If you, as a consumer, give the issuer any reason to classify you as a higher risk, you're very likely to get an increase in your interest rate or a decrease in your credit limit."

In some cases, merely not using your card is enough to trigger a change in terms, as Paul C. Leonard of Dearborn discovered.

Every year, the 59-year-old retired law officer puts a bunch of payments -- from utility bills to his daughters' college tuition -- on his GM MasterCard to rack up reward points for a future car purchase. By March, he's charged several thousand dollars worth, enough to max-out the reward points he can earn for the year. So he retires the card to the back of a drawer until he can start earning points again. .........(more)

The complete piece is at: http://www.detnews.com/article/20090330/BIZ01/903300307/1001/Credit+card+companies+are+lowering+available+credit++raising+fees

[Supersedeas]

1. the second shoe to fall

[dysfunctional press]

2. we've got a few cards that have developed some outstanding balances...

but we're in the process of re-financing to change that, as well as lower our monthly mortgage payment by $400.
and- we're also doing a general 'frugalizing' of our overall lifestyle- we'll only be keeping two credit cards, and no more balances...that lesson has been WELL-learned.