"Subprime May Be Hitting Credit Cards Too, - August 23, 2007"

[Anonymous]

This article was found today at CNNMoney.com.Subprime may be hitting credit cards, too - Aug. 23, 2007

SandyK

[MidnightVoice]

Yup:

Credit card issuers, meanwhile, have begun to take steps to protect themselves. Curtis Arnold, CEO of CardRatings.com, has seen evidence of issuers boosting transfer fees and introductory rates, reducing the periods for which lower introductory rates are valid and even lowering credit limits on existing cardholders, including some prime customers.

"That correlates in my mind with what's going on in the subprime market," Arnold said. "I wouldn't say [these moves are] widespread, but I think we'll see an uptick."

That's why he cautions consumers to keep a close eye on their credit card bill and, in particular, any pamphlets that accompany them which may notify them of policy changes.

[Anonymous]

To anyone thinking:

• I have enough CCs
• I have enough overall CL
• I have low enough APRs on my CCs

I would encourage you to rethink those those conclusions. You're at lower risk of a rate jacking, CLD, or F/R if you have extra CCs with additional CL that you don't need. And if you suffer one anyway, you can offset it with your other CCs.

[Anonymous]

This is really some scary stuff!  All kidding aside, I have applied for my last credit card for a long long time.  

This is the time when having 1-9% of utilization on a card will pay off.  It would behoove me to take my new credit line from Citi Upromise and Chase (if I am approved) and pay off as many cards as possible.  Already I have paid off two this month!     Just a few more to go now. 

SandyK

[Anonymous]

I agree with you Noah.  I feel one needs to apply for credit right now and conserve some of that credit line if they are thin in the credit department.  Time is of the essence, however, because fewer applications are going to be approved IMHO.

Would it be a wise move to apply for cards now if one has been dropped from an authorized user's account? 

Subprime mortgage and dropped from being an authorized user seems like a double negative whammy to me!  What on earth can people do to repair their credit now?

SandyK

[Anonymous]

What bothers me about this latest action is that is will force the smart credit user to dumb themselves down or take a chance of being hit with penalties just for being a smart shopper.  For example I recently open two credit cards that I otherwise would not have opened.  One was Best Buy the other was Circuit City.  Due to the need to replace two comps, and the 0 for 12 (not a purchase I planned to PIF at the end of the month) it was smarter just to open the new card instead of making the purchase on a 14% card.

The way this looks, to do that probably put my existing credit limits at risk although these were store cards.  Does the American consumer really want to be hamstrung out of fear into making purchases for less than a desirable rate?

What about going from subprime to near prime to prime.  Should a cardholder be forced to hold onto a credit card for say an additional year at a ridiculous rate, just to prevent the negative backlash.  I only look for new cards when they better-deal the ones I have and I have not yet made it to the prime ranks (whatever that means). I guess now you just have to close that card BEFORE you app and keep your fingers crossed and hope for the best.

I really have a feeling that this is going to go from bad to worse.  I'm looking over my portfolio as we speak to see which less than desirable cards need to go on the chopping block to free myself up to apply for better deals.  Maybe this will be the unintended consequence for the lender.

To make it worse, the average consumer will be caught unawares. Suddenly experiencing CLDs and F/Rs on cards they thought they had shown good stewardship to.  The banks reponse, 'Its all coverd in that ''for any reason'' clause.

Message Edited by Brammy on 08-24-2007 08:39 AM

[Anonymous]

Brammy,

Good read. 

Now is the time to take inventory of what cards you do have and like you said, "Send some of them to the chopping block" .   

Apply  for those cards that will give you a fresh line of credit to keep in abeyance to ride out this storm; preferably cards with good balance transfer options so you can make a quick transfer in case you're having a problem.

  My two- cents worth.

SandyK

[Anonymous]

---

sankofa wrote:

Brammy,

Good read. 

Now is the time to take inventory of what cards you do have and like you said, "Send some of them to the chopping block" .   

Apply  for those cards that will give you a fresh line of credit to keep in abeyance to ride out this storm; preferably cards with good balance transfer options so you can make a quick transfer in case you're having a problem.

  My two- cents worth.

SandyK

---

Well I just closed two low limit store cards that will not hurt my uti at all. Especially seeing that one store card just upgraded to Major with enough to cover the two closures with the exception of two hundred dollars.  Less than 1% of my total credit. Waiting on my next CLI on a major to see which of my majors will be going next.  Luckily my oldest open card has an outstanding rate so its safe.   I would say its down to two but the truth of the matter is that there is only one in my wallet that is totally useless in my book. A graduation cardfrom Subprime that has not grown with me..

At least this way when I call a CSR and let them know that I am going through my portfolio to see which cards to keep and which to close, they will know that I am serious.  Walmart advised me to keep the card for emergencies....oh yeah I have a Walmart Emergency just about every other day

[Anonymous]

Wise decisions, Brammy.  You will fair well.  In reading your posts to others, you give good constructive advice. 

LOL, I loved your response to the Walmart emergencies!!! 

I received two preapproved offers in the mail, one from Lowes and the other one from Home Depot.  I shop them both but not about to apply for anymore cards.  With this housing mess, stores like Lowes and Home Depot will suffer because people are losing their homes and will have nothing to fix up.  Housing starts are at a all time low and lets face it, when times are bad, people tend to put off home improvements.  

 All will not be gloom and doom.   Things will get better.

SandyK

[Anonymous]

I have found the best way to offset this subprime mess ...... pay in cash!!

I have cut up my last credit card "Discourage Card"