Just as Americans grow more reliant on credit cards to help pay monthly bills, they’re being hit with a one-two punch: Card companies are reducing borrowing limits for tens of thousands of consumers, which then can lead to lower credit scores.
Those facing this predicament might not even know it until they apply for a loan or another credit card, and then get denied because their credit score has dropped.
This is an unintended consequence of the financial world’s widespread ratcheting down of risk. Banks and other card lenders are trying to better protect themselves from more massive losses like those they’ve seen from subprime mortgages.
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