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MONDAY, NOVEMBER 23, 2009
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Lenders Yank Credit Cards as Economy Sours

Plastic crisis comes hot on the heels of mortgage crisis

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(Newser) – The flattening economy is putting the squeeze on credit card lending just when consumers can least afford it, the New York Times reports. Lenders are putting the brakes on new credit card offers and reining in lines of spending for existing holders, even those with good credit records. The flood of credit card junk mail has slowed to a trickle nationwide.

Cardholders working in troubled industries or living in areas battered by the housing crisis are finding their credit limits slashed by lenders keen to protect themselves. Even with the rollbacks, the credit card industry is expected to lose at least $55 billion in bad loans over the next year and a half—and unlike in previous downturns, there is less scope for hiking fees this time around.

A rising number of lenders are cutting off lines of credit and refusing new credit card applications.
A rising number of lenders are cutting off lines of credit and refusing new credit card applications.   (©TheTruthAbout...)
The credit card industry is cutting back after years of aggressive expansion.
The credit card industry is cutting back after years of aggressive expansion.   (©Mene Tekel)
A cutback in credit card lending is hitting those who rely on credit cards to cover monthly essentials.
A cutback in credit card lending is hitting those who rely on credit cards to cover monthly essentials.   (©~!)
Credit card companies are aggressively cutting back credit lines and curtailing offers as delinquent accounts grow.
Credit card companies are aggressively cutting back credit lines and curtailing offers as delinquent accounts grow.   (Getty Images)
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Credit card issuers have realized their market is shrinking and that there is no room for extra credit cards, so they have to scale back.  People are completely maxed out.
- Lisa Hronek, a research analyst at Mintel

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DavePA
Feb 27, 09 12:56 PM CST
I once saw that sign in the picture at a Wal Mart. Right then I knew we were in trouble. If you are lured into applying for a credit card by a .99 soda bottle, you probably are not credit worthy. Another 'predatory' group credit cards have targeted in the past are college students. While learning to use credit wisely is an important life skill, you could literally sign up for 100s of credit cards plied to you everywhere on a college campus. Reply
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