AUSTIN (KXAN) — While Texas slowly unrolls and attempts to rejuvenate the Texas economy during the coronavirus pandemic, some people are dealing with a new challenge from credit card lenders.
Lending Tree’s Chief Credit Analyst Matt Schulz joined KXAN to dissect some of the current issues facing Americans and credit card lenders.
“What we found is that an awful lot of people are starting to see that credit lenders are beginning to reduce their credit limits on some of their credit cards or sometimes even close those credit card accounts without telling them. That’s an unfortunate reality with where we are now, but it’s something that people need to deal with cause a lot of folks view a credit card in a real economic crunch as a lifeline,” Schulz said.
If you’re dealing with this situation, Schulz says you should place a purchase on that little-used card or move a small subscription over, like Spotify or Netflix, to keep the card active, but don’t spend necessarily.
What advice do you have for those who are in this scary situation?
“The things that people need to understand is that the most likely cards to be closed or to have their limits reduced are ones that aren’t used very often, if at all. That’s basically because banks aren’t making any money off of them so if there’s a way for you to spend a little more on a card that you haven’t used in a while, that’s a good way to help your situation,” Schulz said.
Schulz also said bank’s are following similar strategies to the 2008 economic recession.
“We saw it actually to a bigger degree back then where banks panicked and saw all the risk out there with climbing unemployment and that sort of thing and decided to reduce credit limits and eliminate credit card accounts.This isn’t a surprising thing that we’re seeing this now, but it is something that people need to be aware of,” Schulz said.
You can watch the full interview in the video above.