Lenders Yank Credit Cards as Economy Sours

Plastic crisis comes hot on the heels of mortgage crisis
By Rob Quinn,  Newser Staff
Posted Oct 29, 2008 4:33 AM CDT
A rising number of lenders are cutting off lines of credit and refusing new credit card applications.   (©TheTruthAbout...)
camera-icon View 3 more images

(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.