Credit crunch spreads to cards

SAN FRANCISCO

First banks got tough on second mortgage lines of credit, now credit card holders are getting hit.

Nearly two-thirds of all banks are cutting their customers' credit limits, sometimes without much warning. Banks are required to notify card holders if they reduce the line of credit, but the warning often comes in tiny print, making it easy for the cardholder to unknowingly go over their limit. When that happens, the cardholder gets hit with fees and their credit score suffers.

Some tips to stay on top of the credit card crunch:

  • Check your credit limit on your statement each month and make sure you know the cap

  • Keep your balance at 30 percent of your credit limit less, which can also prevent a limit reduction

  • If your credit line is cut, try asking your bank to restore it to the full amount; if you have good credit, they will often do so

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