Banks Are Hurting All Consumers By Clamping Down on Credit Lines

23 Mar Banks Are Hurting All Consumers By Clamping Down on Credit Lines

The Banks in the United States have run wild for way too long. In Southwest Florida, it seems that there is a bank on each and every corner. The competition is fierce to get your business. This competition spreads right to the credit cards and debit cards that you and I carry in our wallets.

Credit Card Banks have been reducing available credit lines, raising interest rates, and even closing existing credit lines. Why? Because the credit card banks have over extended themselves, and now they have to reign in the credit lines as the economy softens.

As a bankruptcy attorney, I understand the need for this contraction, as the amount of credit extended to the American Public was just ridiculous. As a consumer, I am outraged by this type of negligent behavior.

However, while this activity may be in the bank’s best interest, it is definitely not in the best interests of consumers. I am going to pick on Visa for an example. Imagine you have a Visa card which you save for emergencies, and you do not carry a balance. You are a good consumer and all accounts are up to date; however, for some arbitrary reason, you no longer fit the Visa business model, or you have too much outstanding debt or you live in a zip code where there have been many defaults or foreclosures. You could receive a letter from Visa stating that your credit card account is now closed. This has been happening to people with good credit scores.

What does this do to your credit score? You can be certain that it doesn’t raise your score. On the contrary, it brings your credit score down. Obviously, the credit scoring system is extremely flawed. However, you don’t hear our public servants in Washington taking Experian, Equifax and Trans Union to task, do you? Why? Because our politicians are taking serious money from these corporations and the banks to leave things as they are.

As a consumer, I am outraged by the apparent lack of oversight by our government as well as the arbitrary way in which the consumer credit card banks operate. there is change needed in the United States, here is where the change needs to begin.

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Carmen Dellutri is a proud member of the Florida Bar, and he is a Board Certified Consumer Bankruptcy Attorney, Certified by the American Board of Certification. He practices in the areas of Consumer Bankruptcy and Plaintiff's Personal Injury. He is the principal attorney at The Dellutri Law Group, P.A. The firm supports many charitable and civic causes by donating time and much needed capital to our community. Mr. Dellutri and the other attorneys in the firm routinely speak to students of all ages about various legal and societal issues.
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