How is the Credit crunch going to affect you? Chances are you use a credit card on a regular basis. Are you paying the minimum monthly payments and ensuring that you are staying under the credit limit? The credit crunch means that more people than ever are getting charged higher fees if payments are missed or the credit card limits are exceeded. How is the credit crunch going to influence your credit cards? Are you going to see decreased credit limits, while viewing higher interest rates? Chances are, the credit crunch is going to create responsible credit card users quicker than any other method. Your credit cards are truly in jeopardy.

Did you know that first sign of being in a credit crunch is not being approved for loans, or for credit that you would have been approved for exactly one year ago when the credit market was stable? Some signs of the impending crunch can be demonstrated within the vehicle loan companies. Last year, it was easy to obtain the best interest rate with a FICO score of about 600, this year – to receive the same interest rate, the FICO score has to be at about 700.

The credit crunch is a sudden reduction in the amount of loans and credit that is available to consumers. This could also refer to the increased cost of receiving loans or credit cards from banks or lending institutions. Often, a financial crisis is the reason for this collapse in prices, resulting in higher interest rates. Many times, this effect is temporary – but depending on the state of the economy. It could make it harder for you to receive a credit card for the next few months, or even years.

Up to ten percent of American Express customers are receiving reduced limits based on this exact information. Imagine, using your credit card for a purchase and being declined only to realize that your limit has been cut! As a customer, what would you do? What can you do?

Do you remember the times when you were being bombarded with credit card offers streaming into your mailbox on a daily basis? The credit crunch means that ten percent less of these offers are being sent out to potential customers. The offers that are being sent out are to those without subprime mortgages and those households exceeding more than fifty thousand dollars per year. Imagine, for a moment, that you are living in an area where home values are dwindling, did you know that these areas are receiving less credit card offers than others where home prices are remaining stable? These are the effects of what we have begun to refer to as the credit crunch. How are you going to prepare for it?

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