Some predicting more changes coming for credit card customers

Several studies released during the past two weeks provide some insight into what has taken place in the credit card industry during 2009. That’s according to Bill Hardekopf who runs the website http://www.lowcards.com

Hardekopf says the studies show that some of the practices instituted by issuers may have helped the credit card companies turn the corner on their recent financial struggles.  As many of us know, the two most common things done by issuers this year is cutting credit limits and tightening standards for who gets a card.

A FICO study shows how widespread the reduction of credit limits has been:

** Issuers cut credit limits for approximately 58 million credit cardholders
** 24 million customers had their limits reduced despite a good credit history
** For these 24 million, the average reduction in the credit limit was $5,100, more than double the reduction that FICO observed for comparable consumers six months earlier.

Hardekopf lso says according to a quarterly review by the Federal Reserve, lending standards are still tighter than average and none of the banks in the survey have loosened lending standards or raised limits.

“It is still difficult for anyone with less than good credit to get a credit card loan with a low rate,“ says Hardekopf.

He also says that one survey shows the changes may be providing results for the issues.  In July, the charge off rate dropped slightly to 10.52% from 10.76% in June. The overall delinquency rate declined to 5.73%, the lowest level of 2009.

Some analysts still say however that many credit card issuers are “proactively cleaning house” and that a consumer who doesn’t use the card or under-utlilizes the card is “simply not generating revenue for the credit card issuer.“

As unemployment continues to rise, many says banks will continue to scramble to reduce their exposure to potentially bad credit lines.  Nessa Feddis from the American Bankes Association told NBC recently “Everybody presents a higher risk than they did a year ago and each individual card company is going to look at their own portfolio and their own customers.“

A prominent Wall Street analysts also told NBC that more than $2 trillion dollars—HALF of all credit lines available in the U.S.—may be rescinded by 2010.