With the looming economic meltdown, you undoubtedly have many questions related to personal finance. One of the most pressing probably concerns possible changes to your credit cards by the card providers. If you haven't heard about it yet, you may be in for a less-than enjoyable surprise. What are credit card providers planning? How will this affect you and your daily life?
One thing that will dramatically affect your personal finance situation is the reduction in your credit limit. Credit card providers all around the nation are debating reducing your current limit, right at this moment. What will this do to your current balance? If the amount that you currently owe exceeds your new maximum limit, rumors say that you'll be given a month to get caught up, before late fees and interest fees are assessed. Credit card companies will put you over the limit and charge fees, even if you are currently in good standing? If your credit limit drops far enough, that's exactly what will happen.
Another item under consideration by credit card companies that will affect your personal finance situation is an increase in interest rates. Regardless of your current credit score, it's highly likely that credit card providers will up their interest rates. This is an "across the board" move and does not hinge on the interest rates set by the federal government, which remain quite low. This is simply an attempt by card providers to recapture some of the profit that they are already losing.
How will these items affect your personal finance situation? First, if your credit limit is reduced, your credit score will go down. While this has nothing to do with you (you haven't done anything wrong), it will still affect you in a dramatic, immediate way. Is this legal? While it may not seem so (and it's certainly unethical), it appears to be completely legal.
What should you do to get your current personal financial situation under control before this happens? The best option is to pay off those credit card bills before you are slapped with late fees or over-the-limit charges on an amount that was not in that condition originally. In fact, it may be advisable to use your credit cards as little as possible, only charging what you can pay off in a month. This is the best route to avoid costly charges and keep your credit in decent health.
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