Today, Long Island Power Authority (LIPA) officially announced a 4% rate increase for electricity bills. (See 6/9/08 entry). Heating Oil is now near $5 per gallon meaning that homeowners with oil heat are looking forward to a 1st winter fill-up of at least $1000. Most oil companies give you 30 days to pay before charging late fees and you definitely have to pay or else you won’t get your next month’s $1000+ fill-up. How do most of us plan to cover these extra costs? Credit Cards. Many of us are already using credit cards to make ends meet now that our economic stimulus checks are spent.
Well, before you start whipping it out again, you’d better check your limit. It might not be what it was last month. Yes, credit card companies are LOWERING credit limits based on their assessment of your ability to pay. Now that financial institutions are suffering from mortgage losses, they are turning their attention to credit card defaults which are slowly creeping up. If you are late on any payment or are carrying a high debt ratio, beware, your only notice will be on your bill in that blurb of fine print as usual.
Obviously this is a bad time to lower limits for some people who are surviving on credit cards. At least the analysts see a bright side - credit card companies will in effect help to limit consumer exposure to more debt. So, if you open your bill and your limit has been reduced, please be sure to thank them.
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