Have you checked your credit card lately?
Watch out, as more and more of them are slashing credit limits during this pandemic.
This can cause problems. Here’s what you can do so you don’t waste your money.
Chances are it’s not junk mail.
It may be a notice that your credit card limit has been slashed.
Erin Johnson almost didn't read this letter.
It was a good thing she did: it was informing her that her credit card limit was being cut from $7,000 to $3,000.
"Effective immediately, with no notice, my credit limit was decreased,” she said.
The problem: now her card was suddenly maxed out!
"It took me from roughly 40% utilization on that card to roughly 99% utilization on that card,” she said. “And there was really no explanation as to why."
She was furious, sure that her excellent credit score would now take a hit.
So Erin did some checking online, and soon found out it wasn't just her credit card doing this.
Turns out banks around the country are lowering credit limits, to protect themselves during the pandemic in case someone loses their job and can't pay their bills.
"I was amazed how many people were telling my story on social media just repetitively."
A report by marketwatch.com says unused credit lines are a major risk to banks during a financial crisis.
So it says many issuers are cutting credit limits to all but their best customers.
Erin says she's been with the same bank 15 years and has never missed a payment. Now, she is furious they are possibly hurting her credit.
“I've been working on my credit for quite some time,” she said.
If this happens to you, appeal the decision.
And if your limit is lowered, make sure you are not maxxing out your credit, so you don’t waste your money.