There are many changes happening in the world of credit cards and not all of them are in the best interest of the binocularsconsumer. People who are on top of the game are most likely aware that due to changes implemented by the Federal Reserve and other financial institutions relief is on the way, however these changes will not take place until 2010. Until the new rules are in place consumers can protect themselves by being on the lookout for changes taking place today that can harm their credit score and cost them more money.

 

Reductions In Credit Limits- Many consumers are under the false impression that credit limits are set in stone or that they have to be notified in advance if that limit is changed. Unfortunately until the new changes go into effect in 2010 your credit limit may be reduced regardless of your payment history and with no advance notice. It is important to pay attention to your balance in relation to your credit limit as a sharp reduction could put you in danger of going over your credit limit which may result in over the limit fees tacked onto your bill.

 

Use It or Lose It- On the opposite end of the credit limit spectrum, there are account holders that have little or no activity on their credit card accounts. This lack of usage can backfire as many credit card issuers are closing accounts with little or no activity. You may ask, “why difference does it make if I’m not using the card anyway?”, the damage will be reflected in your credit score as your debt to credit ratio increases. If you have a card and don’t use it regularly consider making small affordable purchases which you can pay off each month.

 

Think Twice Before Negotiating Lower Rates- Until recently the standard strategy to lower your interest rate was simply contacting the credit card issuer and negotiating a lower rate. This may no longer be the best course of action unless you are struggling to make your minimum payment each month. The reason for the change in tactics it due to the fact that requesting a lower interest rate constitutes an application for credit which may trigger unwanted scrutiny in other areas of your finances. Your credit score, job position and salary may be reviewed which could lead to adverse changes to your account.

 

Increased Minimum Payments- If you are experiencing a financial hardship and are struggling to make the minimum payment on your credit card you should know that many consumers are reporting an increase in the minimum amount due each month. When you combine a higher minimum payment with increased interest rates and lower credit limits many people will simply not be able to stay ahead of the game.

 

If you find yourself having difficulty maintaining your payments you should be proactive and contact the credit card company. They may have solutions that could help you make it through these tough times with minimal damage to your credit history. By making the effort to contact them and discuss your circumstances you show that you are making an attempt to rectify the situation which will be viewed in a better light than avoiding the problem completely.



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