Defend Your Credit Limit

Reeling from mortgage losses, banks are reducing credit card borrowing limits, even for some cardholders with good records. Factors that could lower the boom on you: a minor mess-up (being late on payments, even once), living in a high-foreclosure area and carrying other risky debt (such as an interest-only mortgage). A lower limit can push up your debt-to-credit ratio, which hurts your credit score.

You do have options if it happens to you. Consider one or several of these:
- Make an appeal to the credit card company.
- A computer may have cut your limit, but a customer service rep may be able to bring it back up.
- Bluff
- Threaten to cancel. Hurting for revenue, banks can't afford to lose good customers.
- Compromise
- Applying for a new credit card could hurt your score more than it helps. Instead, ask for a lower APR, which will make it easier to pay off you balance.

- From Money Magazine