Sharp Consumer Credit Retraction Pending

[Extra Stout]

The major banks offering consumer credit cards, in a panic to deleverage, will be slashing available consumer credit by 45%, or approximately $2 trillion, by February 2009.

You will notice this as some of your cards are cancelled, and the limits on others are reduced precipitiously.

[clambake]

which ones?

[Extra Stout]

which ones?

Citi, Capital One, Chase, Bank of America, American Express, Discover

[clambake]

have you had any with reduced limits or canceled?

what happens if a card is canceled? do they demand total account payment?

sounds like a good time for people to only pay principle and tell them where to stick interest.

[Extra Stout]

have you had any with reduced limits or canceled?

what happens if a card is canceled? do they demand total account payment?

sounds like a good time for people to only pay principle and tell them where to stick interest.

I only have one active credit card. Its limits have not yet been reduced.

If a card is cancelled, it simply means you can't charge against it anymore.

Demanding total payment would be counterproductive, since a lot of customers would default immediately, but expect fees and minimum payments to go up, up, up.

The broader effect on the economy will be an even sharper contraction of consumer spending leading to collapse of the retail industry, and continuing the downward spiral.

[clambake]

so, no more buying real with fake money?

[ploto]

Good

[boutons_]

reducing the cc limit with an outstanding balance reduces credit rating, since ratio of balance/limit is an input to credit rating.

[Extra Stout]

reducing the cc limit with an outstanding balance reduces credit rating, since ratio of balance/limit is an input to credit rating.

Which allows them to increase interest rates further.

[Bigzax]

so is now not a good time to get a bigscreen on credit...

[Cry Havoc]

so is now not a good time to get a bigscreen on credit...

Like I just did. Blaaaaaaah.

Oh well, it's within my means easily, I can pay the sucker off anytime. Still though.... ominous times.

[RandomGuy]

reducing the cc limit with an outstanding balance reduces credit rating, since ratio of balance/limit is an input to credit rating.

Yup. That kind of creates a self-sustaining cycle.

"We are reducing your available credit because we are concerned we won't get it back."

"Oh look, your credit score just went down. We are raising the interest rates on your credit and lowering your available credit because we are concerned we won't get it back."

I expect to see the limits on my cards drop at some point soon. I am surprised it didn't happen sooner.

[chode_regulator]

Citi, Capital One, Chase, Bank of America, American Express, Discover

i know im just one fish in a big sea, but discover jsut re uppped mine again. by about 25%. maybe its jsut to try to lure me into spending moremoeny and th en really slammin me in the near future.

so is now not a good time to get a bigscreen on credit...

yeah it is. have you seen how cheap tv's are now. well, were i should say on black friday. i bought a new tv when i got back from iraq and it was half price on black friday. talk about being pissed off!