New Credit Card Rules WILL affect everyone - even those that have perfect credit histories.

We are starting to see and will see more of the credit card companies reduce limits, raise rates and even just close your account.

You may be unaware but these changes can have an adverse affect on your credit scores. Many of you understand your debt to income ratio, well there is a debt to credit ratio used by the credit scoring agencies too. So if your limit is reduced or if an account is closed your debt to credit ratio is reduced and that lowers your credit score.

You may be saying, oh great, what next? What do I have to do now to preserve my credit scores (since they affect everything these days)? Well, it's time to take your head out of the sand and pay attention. Knowledge is power and know you can protect your credit.

What to do:

1) If your creditors reduce your limits or close your account simply open another card to replace the lost credit whereby preserving your debt to credit ratio.

2) Apply for a small business credit card. These accounts do not report to your personal credit report. These cards are issued in the name of your small business while holding you personally liable for the debt. This really helps when you carry a balance.

3) If your card charges an annual fee call the CC company and ask them to waive the fee. If they say no ask to speak to a supervisor and tell them you want to remain a "good" customer with their company but if you have to pay an annual fee you will take your business elsewhere. Or close the card with an annual fee and open another without.

Caution: it is unknown exactly what the CC companies will do to preserve their bottom line but we can be sure they will do their best prior to July 2010 when the new rules take affect. Currently we are seeing  new annual fees being added and interest rates increased making borrowing more expensive.

4) If you have had accounts closed and need a new card or two you may be forced to go to a "sub prime" type of an account. But before you accept a high rate card check out small businesses, go local. Your local bank or credit union may be just the ticket.

5) And if you run into trouble with your credit card debt you need to know it is best to settle with the credit card company yourself instead of paying a settlement company hundreds to do the job for you. Why? Because your credit scores will go down. For more on this subject please contact us directly as each situation is different and must be handled on a case by case basis.

Your comments and questions are encouraged. Contact us at marcia@minocquamortgage.com or www.minocquamortgage.com. We look forword to hearing from you.