However, one leading analyst is warning that the consumer credit sector could be due to tighten its belt considerably over the next 18 months.
Meredith Whitney says that credit card companies may be looking to cut more than $2 trillion in lines of credit – which will likely translate into greater difficulty for the ordinary person trying to make ends meet on an already tight budget.
According to Whitney, Bank of America, Citigroup and JPMorgan Chase are among the leading credit institutions looking at ways to curb credit lines, Reuters reports.
Measures to achieve such ends may include closing accounts or increasing interest rates – making for more expensive monthly repayments and reduced access to credit for existing account holders.
“[We] expect available consumer liquidity in the form of credit-card lines to decline by 45 percent,” she reportedly wrote, predicting “a new era in the overall financial landscape.”
Whitney’s comments follow yesterday’s announcement that the U.S. economy officially entered recession in December 2007 – something widely anticipated in view of the longstanding rockiness in the financial markets and the increasing tendency by consumers toward keeping their pocketbooks closed where possible.
With access to credit apparently set for a further squeeze, the importance of handling your personal finances will probably become more pressing.
To keep your credit rating healthy, experts advise you make your regular payments on time, pay more than the minimum whenever possible, and keep your credit to debt ratio – the amount of money available for you to borrow – as low as you can.
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