"Not So" Recession Proof Financial Planning

Audrey, no but I have heard that the credit card companies may start tightening up. You are the first person I know of that has actually had the experience.

That's why they say cash is king; you never know what kind of financing might be available in HELOCs or on credit cards.

Cash may not be king for long the way things are going.  We may have so much inflation our dollars will be worth a lot less.  I have heard about people getting their credit lines greatly reduced.  I think sooner or later, they will have to relax things a bit, because they do not make any money if they don't lend. 

Hi Audrey,

Yep, it's happening all over. My son and daughter in law had a similar situation. They sold a property and chunked down their HELOC by $30,000, thinking it would be there if they needed it only to find their limit was DECREASED by the same amount. Keep in mind they have a 800 FICO, he was livid!

It's happening to lots of folks. Although rate vary from .01 to 2.7 in the bank, it might be safer to park a a few bucks there when possible.

Terrible news and it sure makes it tough to operate a business if you are accustomed to doing so on borrowed money.  People have to remember that a credit card is not a 'cash reserve'.  Money in the bank is a cash reserve.  Assets which can be liquidated are a reserve.  A loan or an available debt instrument should never be considered a 'reserve' since it is not your money.  Not yours before you borrow it and not yours after you borrow it.  It is the banks money and unfortunately many are learning that the banks can do whatever they want whenever they want with their money.

You can call them, but their customer service is so horrid that you will be lucky to get someone who you can communicate with before they tell you that they simply dont care about you.

The government should have let 60% of them go under.  Then maybe they wouldnt be such jerks to customers.

Many credit card companies in the USA have been cutting back credit limits for many months.  I have read about numerous situations where this occurred in many financial related forums as well as in well known newspapers (e.g. New York Times).  A credit card limit or line of credit limit is *** NOT *** the same as cash in the bank.

Audrey - Many of the credit card companies and commercial lines of credit have been reduced to pennies , in relation to their previous values.

If you have been consistently applying larger sums of money than required on your credit card/line of credit , you've set off a RED flag to the credit card company. You are a smart consumer and they will no longer continue to make money off of you.