Why Your Credit Score May Drop Soon

What's Hot

Do This or Your iPhone Bill May SkyrocketSave

23 Upgrades Under $50 to Make Your House Look AwesomeAround The House

Trump Worth $10 Billion Less Than If He’d Simply Invested in Index FundsBusiness

11 Places in the World Where You Can Afford to Retire in StyleMore

What You Need to Know for 2017 Obamacare EnrollmentFamily

8 Things Rich People Buy That Make Them Look DumbAround The House

32 of the Highest-Paid American SpeakersMake

Amazon Prime No Longer Pledges Free 2-Day Shipping on All ItemsMore

More Caffeine Means Less Dementia for WomenFamily

9 Tips to Ensure You’ll Have Enough to RetireFamily

5 DIY Ways to Make Your Car Smell GreatCars

30 Awesome Things to Do in RetirementCollege

5 Spots Where Retirees Can Live for Less Than $40,000Real Estate

10 Ways to Pull Together the Down Payment for a HomeCredit & Debt

10 Ways to Reduce Your Homeowner’s Insurance RatesFamily

50 Ways to Make a Fast $50 (or Lots More)Grow

New banking decisions in the midst of a recession mean even responsible borrows may see their credit scores drop.

Some Americans use them for convenience, others by necessity, but almost all of us take credit cards for granted. Yet life in the land of plastic may soon be changing… and not for the better.

There are two reasons why. The first is that as with mortgages, default rates on credit cards are rising. According to Moody’s Investors Service, default rates industry-wide have risen nearly 50% since last year.

Something else on the horizon is 62 pages of proposed new regulations that would help consumers but make credit cards less profitable for banks.

And banks are reacting: by lowering limits, raising rates, even closing inactive accounts. These things mainly affect those with lower credit scores… but they also cause lower credit scores.

How? If your limit is lowered, or a card is canceled, that lowers your available credit and raises your percentage of credit used. Result? Lower credit score.

So what can you do? First, make sure you’ve got an extra card so if one gets canceled or the rate become unreasonable you’ll have options. And if bad things do happen, call the bank. Talk to a supervisor; negotiate a lower rate or better deal.

Bottom line? If you’ve been following the mortgage mess, you already know the story: lenders are losing money so they’re getting tougher. And that means it’s time to clean up your credit, and use as little as possible.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: Taco Bell Is Handing Out Free Food for World Series Stolen Bases

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,677 more deals!