Last week I got a letter in the mail from Capital One, my credit card company. I opened it, wondering if they had started sending me those annoying checks again.
Nope - it was a letter informing me that they had increased my credit limit! This made me quite pleased.
I had actually applied for an increase about a year ago. I don't really need a higher limit - I've never exactly come within striking distance of my current one, and always pay off the balance in full - but ever since my apartment complex started letting me charge my rent to my card, I've gotten closer to it. I figured that I MIGHT need a higher limit some day, and in case applying for the increase would hurt my credit score, I wanted to do it early to get it over with.
They'd turned me down, for no particular reason, but a search online revealed that they and all the other credit card companies were doing the same to everyone. It's all part of the credit crisis: because the banks have been so nervous about their exposure to debt, they try to make their balance sheets look as solid as possible. They do this by minimizing the amount of money they make available to lend out, which is why they've been reducing credit card limits and freezing any extensions to existing ones.
Apparently that will soon be a thing of the past. It will be interesting to see how things play out in response to the new credit card reform act passed by Congress this year. The banks are whining about how they will need to raise fees on their best customers, but I agree with Chris Farrell at Marketplace Money. The best consumers will be able to call the shots, and if some banks try to screw them over, other banks will profit by stealing them away in exchange for better terms.
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