Banks Slash Credit Card Limits As Economic Crisis Not Over

While the Federal Reserve and the Trump administration plow trillions of dollars into corporate America, buying investment-grade bonds and rocketing the stock market to new highs, there's a much different story playing out of economic hardships for the everyday American.

There's a massive pullback by credit card issuers at the moment, reducing credit limits and canceling accounts of consumers.

CompareCards' new survey shows the economic fallout from the virus-induced recession is far from over. About 25% of Americans with credit cards had an account involuntarily canceled between mid-May to mid-July, while 33% said card companies slashed their credit limit.


About 70 million people – more than one-third of credit cardholders – said they involuntarily had a credit limit reduced or a credit card account closed altogether in a 60-day period stretching from mid-May to mid-July.

The report is a clear sign that credit card issuers are still closing cards and reducing credit limits on cardholders in huge numbers, months after an April 2020 CompareCards survey showed that nearly 50 million cardholders had a card closed or credit limit reduced in the first month in which the coronavirus pandemic took hold of the country. - CompareCards

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