Prominent banking analyst Meredith Whitney of Oppenheimer & Co said that the U.S. credit-card industry may pull back well over $2 trillion of lines over the next 18 months.
Credit Cards are dominated by five players who are all pulling back liquidity due to risk aversion and regulatory changes.
What does this mean to you, the consumer?
Broad-based declines in overall consumer liquidity will result in 45 per cent less credit available. Coupled with increasing unemployment this combination is “dangerous and unprecedented.”
Diligently monitor your credit lines to make certain you don’t exceed your spending limits and incur unnecessary overage charges.
Lastly, if you desperately need credit to get by and fear that a reduced limit will impede your ability to acquire the necessities for your family’s survival (meaning food, shelter and health, not an Xbox for Xmas), apply for another card pronto.