The Fed found 85 percent of banks tightening their guidelines for commercial and industrial loans, which were up from June survey which reported 65 percent.
Even further 95 percent of the banks reported tightening guidelines for lines of credit. Number of larger banks reported tightening credit for credit cards and loans where 60 percent of banks responded with tightening credit card debt, while 65 percent responded with tightening on consumer loans.
With Fed survey there is a sign on Wall Street that banks are increasing their credit supply. Even with tighten credit banks are now considering changing their credit guidelines.
For credit cards, banks are still not willing to take any further chances with many borrowers and now many of consumers see their limits reduced. A survey of credit card industry showed that 62 percent of credit companies will plan to reduce lines of credit because of economic conditions.
American Express changes credit limits 20 percent of its customers every year and more limits are being lowered than raised.
Many companies are working on to lower their risks if customer defaults on credit card payment. By cutting credit limits or closing accounts can have a negative affect on credit reports score. One way credit score is calculated is debt to available credit ratio. The closer the debt is to a credit limit, the lower the score.
Any credit changes will be corresponded by bank in writing, in which case you can leave it as is or move your debt into another credit card.
Other chance is to reverse the decision by calling a bank if your credit score is still good. Bank will investigate and provide you with their decision.
If you have a card that has not been used, use it for small purchases which will also help you to increase your score.
Most important part is not to miss a payment. Fees will accelerate after you miss a payment and it will be hard to catch up.
It is important in today's credit crunch to save money. Downsizing is one option as large homes and fancy cars make people look, but behind those fancy things is debt. Right now many consumers should be looking to lower their standard of living.
If you are living paycheck to paycheck avoid credit cards at all cost. If you have credit cards start to lower your debt. Don't use credit cards if not needed and don't always make minimum payments.
To save money you can add to 401K or open up a new account that will withdraw fund from your paycheck automatically and deposits them into high-interest saving account.
As holidays are approaching many consumers will be saving even more and buying only what is necessary. U.S. economy will improve and when it does many consumers will be still paying off their credit balances.
America Secured Credit Cards
A Building Block of Life
Did you know the average American family carries about $8000 in credit card debt and has on an average 6 cards? Furthermore, if no additional purchases were made and the average family made only minimum payment, it would take 22 years to pay off the average credit card debt. Credit card debt is counted in the billions of dollars.
Credit is positioned like a platform or building block of life. ?And for everything else there's xxx card.? It is almost considered inconsequential to use your card. It seems the purchase (whatever it is) is ?far too important? to have any cost matter.
Therefore we use it, and use it, and use it until we literally cannot survive without it. Some folks would be shocked to learn that not carrying a credit card is not against the law?
Smiling Creditors Are Not Your Friend
Creditors are not doing any favors by extending credit no matter how friendly their facade. Their purpose is getting you hooked and draining off your future wealth. This is future money that you can't even guarantee is going to be there. Why? Can you guarantee you will have your job tomorrow, next week, next year, in 10 years? But we promise it away just the same.
Creditors are not giving us anything. They're not adding one penny into our life. Consider this. Creditors do not make a penny until we go into debt. Therefore, do you really think they hope to contribute to your future wealth or do you think they just might prefer that you are horribly irresponsible and charge everything you see? They want you in debt and the deeper the better.
And just as you think you are smart enough to climb out of your credit entanglement, your "friendly" credit card executives are figuring more and better ways to offer conveniences to entice you to use your card even more. For example:
1. Have you noticed how many fast food places now take credit cards? Now there is a conflict in ideologies, ?fast food? and ?credit card?... hhhmmmm.
2. Did you know taxicabs and parking lots now take credit cards? I sure hope it's a deductible expense. The compound interest it generates, of course, is not.
3. Movie theaters now report 25% of payment is by credit card.
4. The other day I saw a young man at a grocery store paying for 5 candy bars with a credit card. Talk about short-term pleasure and long-term pain. That has got to be a prizewinner.
5. IRS now takes credit cards--- a double whammy.
6.Many mortuaries now take credit cards. Why does that sound strange and why is it a fitting last example?
The fact is, credit card executives now know that most credit worthy people already have 2+ cards. But they still send out 2.5 billion solicitations annually and the average household receives about nearly 24 applications per year. Still, finding innovative ways to increase credit debt is their primary solution to increase profit. As one bank card executive reported, "We will break down the barriers of debt." If that doesn't sound like drug dealing I don't know what does.
What Will We Teach Our Children?
Until we learn to shut off the wealth sucking valves, we will continue to drown in a sea of debt. Until we stop creating new debt with the convenience of a credit card, we will continue the strangle hold of our creditors. Until we start operating on a cash basis, we are doomed to a life of debt.
Our future and the future of our family is at stake. And until we make a decision in favor of ourselves instead of the credit card industry, we will foolishly squander our future by living in an illusionary world and paying its price,just like an addict.
I offer one final note. Obviously I am opposed to credit cards. But I also recognize that we live in a world of plastic. In and of itself, there is nothing wrong with a credit card. It is an innocent piece of plastic. It is what we do with it that makes a difference. If an individual finds they cannot control their use of the card, the card must be completely eliminated. It is as simple as that.
Both Ratetake & Michael Killian are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Ratetake has sinced written about articles on various topics from Finances, Debts Loans and Debt Consolidation. Susan Duey represents RateTake marketplace. RateTake matches consumers with multiple lenders offering low mortgage rate quotes. RateTake also operates #1. Ratetake's top article generates over 49500 views. to your Favourites.
Michael Killian has sinced written about articles on various topics from Credit Cards, Personal Finance and Self Improvement and Motivation. Mike has been an Internet Guide/Writer in the field of Credit/Debt Management for over 10 years. His site was awarded Best Of Net by Forbes Publication from 2000 to 2005 with site visitation doubling to over 500,000 average views per month in the last ye. Michael Killian's top article generates over 135000 views. to your Favourites.
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