Finance Roll

In the same way that the other lending fields have been feeling a crunch in recent months, it is expected that the credit card industry is going to be tightening it's belt soon.

The mounting problems for most lenders right now relates to mortgages. Many banks and lending institutions gave much more in lending than they should have to many of their customers. Eventually it started catching up with them, as their customers could not make their mortgage payments (because they were more than they should have been in the first place) and then started defaulting on those mortgages.

Now the concern is that the same thing has happened in the credit card market. Many people have been allowed to get more and more credit cards with higher limits in recent years. Many credit card companies kept upping their limits so they would spend more because they didn't foresee a backwards spiral from their actions.

Now many people are in too deep of debt and are filing bankruptcy, leaving the banks with the debt. This is causing them to rethink what they had approved in the past. Many are rolling back credit limits and tightening the usage of cards they have issued.

What does this mean for you? This means you better know what your limit is and know how you will deal with a lowered limit from your credit card company.

Read the Mailings

Your credit card company will have to let you know if they are going to change your limit. But, if you are like a lot of people you get so many mailings that you don't pay close attention. Change that habit. It could be one line in a statement or other notification that tells you they are lowering the limit.

Additionally, many credit card companies are upping the interest you will have to pay on your cards if you keep a balance on them.

Use Wise Credit Practices

The next thing you need to do is use the best credit cards practices you can. If you have debt on your card here's what you need to do:

Charge what you need to and make sure you can pay a lot of it off at the end of the month - This way you will not be surprised if you suddenly have a lower limit as it will not impact your monthly credit card usage.

Don't miss a payment - One missed payment looks like you are having tough times and can cause the credit card company to clamp down on you.

Try to keep your overall debt at ½ or less of your credit limit - Some credit card companies are chopping credit limits by as much as ½. If you know this and keep your outstanding debt below this point you should not be damaged even if they decide to cut your credit.