According to a recent Consumer Action survey, 20% of credit cardholders have had their credit limits greatly reduced in recent months. About the same amount of people are very near the limit on at least one credit card. Many analysts are predicting this is only the beginning; the banking analyst company Meredith Whitney thinks that issuers will cut credit lines by about $2 trillion over the next year-and-a-half. Could you be next?

If you receive that letter in the mail informing you that your credit limit has changed, don’t fear. You still have a few options that may help you out, potentially even getting the decision reversed. Take these steps when you receive a credit limit increase and with patience, courtesy and a little luck, you may get your old credit limit back or find a good deal elsewhere.

1. Complain with Courtesy
Many people are finding their credit limits cut, despite years of on-time payment and a high credit score. If you’ve never had a late payment and see no reason for the limit decrease, call customer support. Speak to someone about restoring your credit limit, but be polite. Don’t be rude, but make sure you mention that you’ll take your business elsewhere. It costs about $300 to replace a customer so most issuers will respond to that. If you’ve been a good customer, chances are you may have your limit restored. Don’t hold out too much hope, though. Credit card companies are getting stingy with credit and the economy has tightened restrictions.

2. Balance Transfers
If you have good credit, think about transferring your balance to a low interest credit card. Find a good card based on your credit and look for low interest rates, introductory offers, and a low or zero percent balance transfer fee. As long as you understand how long your introductory term will last–and what your interest rate will be afterwards–balance transfers can be a great way to deal with a credit limit that’s been cut, leaving you over your limit on a credit card you kept a balance on.

3. Go with other companies
Try looking for a smaller company or bank if you aren’t getting a good deal with your current bank or can’t get them to reinstate your credit limit. There’s still plenty of competition in the credit card industry, particularly for individuals with good credit or a score above 700. Do plenty of research when using a company you aren’t as familiar with and make sure you read all terms and conditions and know what you’re agreeing to. Some of the best places to get a great deal are your credit union or local bank chain. Credit unions have a charge-off rate of only 2%, whereas big banks and companies have rates as high as 7%. Since you probably have history with these lenders, they’ll be willing to give you good terms and a high credit limit.

4. Understand your credit situation
If your credit limit has been lowered suddenly, it may signal that lenders are viewing you as a higher risk. Analyze your credit situation and get a copy of your credit report to look for problems. If you’re spending habits and credit use are getting out of control–or you’re missing payments or carrying a high balance–try taking control of your situation to make yourself more appealing to lenders. Keep in mind that things like using credit cards to buy groceries and carrying high balances shows lenders that you’re experiencing trouble financially; it’s up to you to paint a different picture. Avoid going over your limit, pay off your balances in full, and make on-time payments for about six months. After that, try asking your credit card issuer for a credit limit increase. Chances are you’re in a much better place to receive one!

5. Watch closing accounts
Thinking about closing the account? Closing credit card accounts lowers your overall available credit and decreases the average age on your accounts, often negatively affecting your credit score. If your credit limit has been decreased–or you’ve been hit with higher interest rates–think twice before closing the account. Before closing the account, speak to customer service again and talk to them about your possible decision. You may end up getting a new credit limit, or even a better interest rate. If that fails and you still want to close your account, pay off the entire balance before you do so. If you don’t, your credit utilization will be horribly affected, along with your credit score.

6. Is a lowered credit limit a bad thing?
Lastly, think about this: for many consumers, lowering their credit limit gives them less access to debt and creates a chance to free themselves from the cycle of debt. If you’re inexperienced with credit cards or carry balances, a credit limit decrease may be a good thing. This applies especially to students, as well as those with a fixed income or people with irresponsible credit use.

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