The new reality
The banking industry is running scared. They think you won’t be able to keep up with your credit card payments in 2009 as the nation continues to work its way through this economic meltdown. Of course, that’s a justifiable concern whenever the economy slows down, jobs are lost, and unemployment rises. But what’s different in 2009 is that banks are already reeling from the mortgage-default crisis that has triggered bank failures and shotgun marriages between weak banks and less-weak banks. Banks aren’t exactly in great shape these days and they are painfully aware of a Category 3 hurricane about to bear down on them: National credit card debt is at a staggering $970 billion, 50 % higher than when the last economic slowdown hit in 2000. That’s what happens in an era of “easy” money where banks irresponsibly hand out multiple credit cards to anyone with a pulse, regardless of income, and consumers are all too eager to play along.

The game, however, is up, my friends. Credit card companies have reversed course. They are now looking for ways to lend less money, espe cially on accounts they deem risky: consumers with high unpaid balances and poor FICO credit scores. Reducing credit card limits, closing down accounts with no warning, and abruptly increas ing interest rates are just some of the aggressive tactics the card companies are implementing right now to shore up their business. That means seri ous repercussions for you throughout 2009. Your FICO score may drop — not because you changed your financial behavior, but because the credit card companies changed the rules on you.

This entry was posted on Thursday, July 15th, 2010 at 9:07 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.