It has become necessary to carefully review your credit bills and the notices contained therein. Even after doing this, you are still in danger of risking your financial standing. It is up to the individual to constantly be vigilant about following up and confirming credit limits and interest rates.

A current trend with card issuers is that they are arbitrarily reducing the credit limit on cards and, frequently, not even advising the cardholder that this has happened. It would be nice if we had safeguards in place to keep this from happening but, apparently, we do not. Yes, they are entitled to reduce your credit limit at will and not even legally responsible to advise you. Some send notices that are included in those fine print inserts we receive with our bills. Others just change the amount on your statement and assume that you will notice it. Many of us, of course, do not. It’s amazing how when they want to get you to be their customer, they send you all types of beautiful promotional key rings and promotional mugs, but once you become their customer they don’t even feel important notices are important.

There are many consequences that can result from a reduction in your credit limit. You can be denied when attempting to make a large purchase. Even more upsetting, is to be approved for going over your limit for which you will be charged a fee, possibly as much as $36. Once you’ve gone over your limit, your interest rate will frequently be adjusted upward. This can happen with all of your outstanding debt, not just this particular card. By lowering the ratio of debt to available credit, your credit rating is in danger. A review will possibly lower your score which results in higher interest charges on both current and future loans. It is even possible that you could be turned down for employment as many companies routinely check your credit ratings before offering you a position. Debt can frequently lead to marriage problems which brings just more trouble into your life.

There are several things you can do to stay on top of this situation.

Verify your credit limit with the issuer, especially prior to making a large purchase.

Get your free credit report annually and also request your credit score, which will cost a fee. Monitor these closely as you want to be certain that all information is accurate.

Be certain to keep your outstanding balance at 50% or less of your available credit limit. Anything higher makes you look like a greater financial risk and will result in a lower credit score or higher interest rates.

Make it a habit to pay your bills early. Even if there is a mail delay or a processing delay, you will still be on time thereby avoiding any late fees.

By keeping a sharp eye on your financial situation, you will maintain a good credit rating which will be a savings to you in the long run.

We have all heard numerous advertisements for special deals, particularly from electronics companies and furniture retailers. These special deals generally refer to no money down and, sometimes, many years to pay at no interest charges.

The one thing the ads do not point out is that accepting this offer may damage your credit rating. Although that doesn’t seem likely to most of us, the reality is that this does occur.

Credit reporting agencies follow specific guidelines that we are not always aware exist. One of these is that they rate consumers on the amount of their available credit used. Credit reporting agencies expect that you will use 30% of the available credit on a specific account. If you use more than 30%, this is perceived as a negative and can result in the lowering of your credit rating.

When you apply for a store credit card connected with a specific purchase, they usually extend to you a credit line that will cover your purchase and leave a small sum for future purchases. Often, the consumer is using 80% of their credit line for the purchase they are making. This does not sit well with credit reporting agencies. Since 80% usage against a credit line is a negative factor, your rating will automatically be lowered. Of course, the consumer is not aware of this fact while making this purchase.

Before you decide to accept any special deal from a furniture retailer or electronics company, consider the negative effect it may have on your credit rating. This deal could cost you higher interest rates with other companies in the future.