And Still More on Credit Card Credit Limits Being Reduced

Another person on my favorite Forum just got her AMEX card declined when she thought she had plenty of credit available. More on that tomorrow when she calls them.

And as I suggested, Automatic Payments are being affected - I just got a notice that a monthly charge I had set up with my AMEX card got declined. Since it is my "card of choice" (ha! not any more!) I know a bunch of other notices are going to start rolling in soon.

To add insult to injury I did find the letter they sent and not only did they reduce my credit limit, they also reduced my cash advance limit to $200.00! Are they kidding? And it is all based on how much credit I have outstanding, not on anything remotely connected to how much I make and can afford to carry in debt.

I have two kids in college with tuition just being paid, just spent $10,000 on my dog who collapsed and was diagnosed with cancer while we were 3,000 miles away, our daughter had an ambulance ride to the emergency room (another $5,000!) for a suspected kidney stone and I bought some furniture for a re-do of our home office. That ate up a lot of credit on my cards...does it mean anything? Just that I had a rash of unexpected or one-time expenses that got put on my cards while I re-grouped. Does it mean I'm suddenly going to stop paying my credit card bills, or be late with them?

This is a much bigger issue than it may appear on the surface. When FICO scores start reflecting this how will it affect people's ability to get a loan for a car, never mind a house? And as your FICO score drops more lenders will take notice and the cycle of reducing credit lines will extend even further. It's a vicious circle. "Round and round it goes, where it will stop, no one knows."