Over the years, credit cards have played a major role in a spendthrift’s life. Be it in the US or in India, credit cards have eased people’s lives in terms of expenses. Nobody really bats an eyelid before swiping his or her credit card for an impulsive purchase even if their savings account has no funds. If you carry your balances, you need to worry about the interest rate that you are paying on your card. Timely payments, low balances and good credit scores contributes to your credentials as a customer, which earns you favor from your credit card company eventually.

Nevertheless, now the scenario is changing gradually with credit card companies becoming stringent with their clients in terms of offering debt. People who expect their credit card companies to give them a higher line of credit are mistaken as the tide has turned. We don’t know how much impact it will have here in India, but in the US it’s getting slightly difficult now with the new set of rules.

Earlier, people in the US maintained their credit scores by making timely payments, paying off their balances in full and taking lesser cash advances, but now they would need to curtail their expenses. Whether it was home renovation, wedding, holiday or any sort of loan, a low promotional rate on your credit card could easily win you your dream.

The core objective behind the change is increasing debt and default. The banks need to take an action in order to control debt, which would eventually lead to better financial system.

Unless people do not get out of debt, they cannot save or invest. If people wouldn’t invest, economy wouldn’t grow. So, now the good credit score would be determined by the least debt on an account or no debt at all.

Therefore, for a healthy economy, credit card companies are inclined towards increasing productivity and lessening default and debt by limiting customer leverages.

1. Charges on your credit card
2. How to choose a credit card?
3. Rights of a share owner