Posted on 05/05/2020 5:37:56 PM PDT by fluorescence
About 1 in 4 credit card holders — or almost 50 million Americans — had their credit limits cut or their card accounts closed in the past 30 days, according to a consumer survey by Lending Tree's Compare Cards website. The reductions particularly affected men between the ages 18 and 38, according to the survey.
Lenders aren't required to tell customers when their credit limits are lowered, LendingTree analyst Matt Schulz said, adding that many lenders made their moves in the past month to avert losses if cash-strapped consumers struggle to keep up with payments amid surging U.S. unemployment.
The credit curbs happened just when household budgets are particularly strained from coronavirus-related job losses and families are believed to be using their cards more frequently. The Lending Tree survey reports that 42% more cardholders said they used their credit in the last month compared to the same period last year.
"While the moves make bottom-line sense for card issuers, they don't make it any easier for cardholders," Schulz said. "The reductions and closures come at the worst possible time."
Total credit card debt is about $1.1 trillion nationwide and has been growing steadily since 2015, Federal Reserve data show. That debt was already crushing many U.S. households before the novel coronavirus struck America, according to CBS News Senior Business Analyst Jill Schlesinger.
In fact, payment delinquencies were at a seven-year high just before the pandemic, Schlesinger said. "Many of these credit card accounts won't will not be able to get paid in-full for a very long time," she said.
(Excerpt) Read more at cbsnews.com ...
I always pay my card off every month. Credit cards are the fastest way to build massive debt and destroy credit. They’re a necessity though
The credit card companies have seen the commercials - “What your credit card company does’t want you to know - we can get you off of having to pay them back...”
Nothing is ever free.
More likely it will reduce the available amount of credit. Credit card rates take into account not only the bank’s profit target, but its cost of money and the risk it won’t be paid back. I understand the impulse to punish credit card companies, but the net effect is rarely (never?) that the credit card company is happy to make a lower profit. The obvious move is to reduce credit lines and to eliminate credit altogether for those who become delinquent.
I would like to think that you are correct but its just not reality.
Well I know that credit card companies jack up the interest rate on people with good credit. Know it for a fact.
“The best way to screw them is to pay it off each month.”
That’s what we do. I worry they’ll cut us off since they aren’t earning much, if anything, from us.
Free money with perks. We get a cash bonus every couple of months. Better than a savings account at a bank.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.