Most banks are responding to the current housing market problems by changing their policies and offerings. For many years, financial institutions have been pushing home equity loans and lines of credit to homeowners. They encouraged people to borrow against their home equity for any reason whatsoever. Suddenly times have changed and banks are changing with them.

If you have a current line of credit on your home and plan to use it soon, you should first verify with your bank that it still exists. Many banks are freezing credit lines, reducing lending limits and, in some cases, refusing to give credit at all. Between the credit crunch and the real estate market problems, the banks feel these actions are necessary to protect their solvency.

Some other actions being taken today are reducing the availability of personal and small business loans. Credit card interest rates are rising even higher as a result of late payments. In order to receive a home loan, you must have a minimum down payment and a good credit report. To encourage deposits, banks are offering higher interest rates on Certificates of Deposit in the hope of bringing in new depositors

The banking industry is making many changes to how they do business and some of these will lead consumers to a different attitude towards spending money.