It’s old news that credit card companies are cutting people’s credit limits. I also read on FatWallet some banks paid people more than $500 for paying down their balance. I checked my three cards. None of them cut my limits. Maybe they just haven’t got to me yet. Besides merchant fees, they are not getting any other revenue from me. I guess they are still OK with that. Every month I use about 15% of my available limits among three cards, and that includes paying a mortgage and a car loan with a card. If they want to reduce my credit limit, go ahead. I think the limits are too high to begin with. I like the questions reader Pelon asked in the comments to a previous post:
“What is a healthy borrowing level for the economy? What were we at before the credit market started to freeze-up? Where are we now? Are we trying to prop up something that is unsustainable or trying to get the market back up to a healthy level?”
So I’d like to ask, how long can you live on your credit cards? In other words, what is the ratio of your combined credit limits on all your credit cards to your monthly expenses? Mine is about six months of expenses. That means I can live on my credit cards for six months if I don’t get a single penny of income. I think that’s very generous on an unsecured basis. What about you? Do you think your credit limits are too high?