Quote:
Originally Posted by boosami
It seems wrong to me that a reason people have huge limits is because they are left over from past accounts that they will not close because it's bad for their credit score. Not wrong on the part of the consumer, but rather on the credit agencies and how they report/determine creditworthyness.
It all can escalate too quickly because of the greed of everyone involved (consumer and creditors). The more you spend, the more the creditors want to offer you credit. The more credit you get, the more you can spend. And then everything blows up, as we've all seen in the past six months.
Before the 1970's, credit cards were difficult to obtain. These days, you can get a $1,000+ limit with no job and zero income. In my opinion, the whole mess needs to be rethought. I'm not sure how, but someone who is maxed out on a credit cards simply should not be able to apply for a second!
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I don't know that all of this is still true today.
Credit Card companies can and do close accounts for "lack of activity" -- this is getting more common with those of us who use one or two cards that offer rewards, and pay off in full each month. The CCs that do not offer rewards, tend to close out the accounts we carry and do not use, simply because they make no money from us.
Essentially it's up to each credit card company as to how to conduct their business. They do view people who keep a balance and do not PIF each and every month more favorably than those of us whom are wise users.
But all CC companies are looking at rates; many of mine have been upping rates. But it does not matter because I will not use the CC if I cannot pay in full for that item beforehand.
I agree that people without jobs should not be issued CCs; but who's going to enforce that?
I agree that people with maxed out credit are probably living beyond their means and when something happens, that will pretty much put these people in a losing situation. But who will enforce CC companies to not make money by transfer fees and issueing more credit?
It's people, us the consumer, that needs to make better choices. They the CC companies, are in it for the money; it's their business, they will not make choices that limit their income.