Credit card crackdown: We know who you owe
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The New York Times tonight weighs in on the next credit squeeze consumers will feel -- what the paper calls ‘the credit card crisis:’
After years of flooding Americans with credit card offers and sky-high credit lines, lenders are sharply curtailing both, just as an eroding economy squeezes consumers.
Here’s the paragraph that caught my eye:
Lenders are shunning consumers already in debt and cutting credit limits for existing cardholders, especially those who live in areas ravaged by the housing crisis or who work in troubled industries. In some cases, lenders are even reining in credit lines after monitoring cardholders who shop at the same stores as other risky borrowers or who have mortgages from certain companies.
That’s kind of scary. Guilt by geography. Redlining, I believe it’s called. You have perfect credit, manage your finances responsibly, and the credit card company dings you because you live in a neighborhood where people are behind on their mortgages? One more from the story:
Even those with good credit ratings are not excepted. American Express, which traditionally catered to more upscale cardholders, said it would be increasing effective interest rates by 2 or 3 percentage points for some of its credit card holders — a move that could, for example, push a 15 percent rate up to 18 percent.
Would love to hear your thoughts on this one.
--Peter Viles
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