Are you close to your credit limit? Many these days find themselves in that position and wonder how they got there. Are you one of them? If you are, you are not alone. A survey conducted by Javelin Research on behalf of eBillme, tracks the number of people close to their credit card limit on a quarterly basis.
What does the data show? Just over 30% of consumers state that they are close to their credit limit now than they were a year ago. So how did that happen? Did consumers spend their way into this position? Unfortunately in some cases the answer is yes. However there are other contributing factors.
1) Some consumers intentionally reduced their credit lines and credit card limits in an attempt to reduce their maximum exposure
2) Financial institutions stopped lending, as a matter of fact, many reduced consumers credit limits on their own. This started to happen way before the credit crunch story became everyday news. Data show that in May of 2008, 62% of surveyed financial institutions reported reducing lines of credit (Survey conducted by Javelin Research: May 2008)
If you find yourself in a position where your credit limit has been cut below your debt level you have a couple of options:
1) Try to pay it down as soon as possible
2) Try to transfer the money to another account (hopefully it has lower interest) and start paying it down
3) Try to negotiate with your issuer, either try to get your limit high enough to cover your debt or work out a payment plan
4) Avoid adding more debt on other lines of credit or different cards.
Good luck reducing your debt, and best wishes for good financial health.
