Are you close to your credit limit? Like many, it probably happened so fast you wonder how you got there in the first place. If so, you aren’t alone. A survey conducted by Javelin Research tracked the number of people close to their credit card limit on a quarterly basis.
What did 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, you may want to ask yourself if some of these factors apply to your current debt situation:
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 shows 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) You can try to pay it down as soon as possible.
2) You can try to transfer the money to another account (hopefully it has lower interest) and start paying it down.
3) You can try to negotiate with your issuer. You should either try to get your limit high enough to cover your debt or work out a payment plan.
4) You can try to avoid adding more debt on your other lines of credit or different cards.
Good luck reducing your debt, and best wishes for good financial health.
