Here is another sign of credit crunch hitting credit cards. We just received a letter from Citibank informing us that the purchase APR has been raised to 13.99% + prime with a minimum of 19.99%. The same day we got a letter from an affiliated card (store credit card) that GE (the issuing bank backing those store cards) is reducing the credit limit by 40%. Last time we checked not so long ago, we have 800 credit score. So I don’t know what would be the rate or credit limit cut for people having average credit scores.
It doesn’t affect us in either cases since we never use up the credit limit or carry a revolving balance. But for people really need the money, life will become even more difficult. As traditional banks falter, maybe this will create more openings for new payment management solutions – Paypal, Amazon etc – to grab more market share.