Yes, it’s true. Another financial crisis is swirling — this time concerning credit cards. Specifically: it’s getting a lot harder to qualify for credit. That’s a tough thing for many consumers.
The New York Times has an article about the tightening credit card industry.
“If unemployment continues to increase, credit card net charge-offs could exceed historical norms,†Gary L. Crittenden, Citigroup’s chief financial officer, said.
Faced with sobering conditions, companies that issue MasterCard, Visa and other cards are rushing to stanch the bleeding, even as options once easily tapped by borrowers to pay off credit card obligations, like home equity lines or the ability to transfer balances to a new card, dry up.
Here are three things you can do to protect your credit worthiness:
1. Be prudent about spending on your credit cards. If you already carry a balance it is important to keep that amount in a manageable range. If you are concerned about your ability to pay your balance in full — or even pay the minimum due — take a serious look at your budget. Now is the time to consider what lifestyle changes need to happen to keep your credit cards manageable. Geezeo offers an easy-to-build custom budget.
2. Don’t “card-hop”. Typically, jumping from offer to offer erodes your credit score. Now a reduced credit score will have an even greater effect on your ability to rent an apartment, buy a house, or even get a job. Know your credit score and correct any errors. Here’s how you can improve your credit score. And here’s a Geezeo Expert you can ask credit-related questions.
3. Protect your credit score. Protecting your credit score should be something you already do — but if you’re not actively protecting it, now is the time. If you’ve had your identity stolen in the past it is always a good idea to pay for a credit monitoring service. Other common sense things you can do? Do not share sensitive data like your social security number. Remove yourself from mailing lists. Shred all discarded documents that contain sensitive information.
Remember: you cannot control what happens with the credit card industry. You can, however, control your personal credit. Spend on your cards responsibly, make careful moves from card-to-card, and actively protect your credit score and identity.
November 10th, 2008 at 3:13 pm
Katie,
I've got another one for you. Refer them to a debt reduction company that can cut thier credit card debt in half! Try http://www.nationwidedr.com/