August 25th, 2009 by Reed Allmand 
According to an article in the Star-Telegram, credit card companies slashed credit limits for an estimated 58 million credit cardholders within the past 12 months, many of those credit card consumers had high credit scores, no missed payments and in some cases no balance. FICO studied a group of 30 million credit card consumers to find out exactly who was being targeted by credit limit cuts.
The article said:
“About 73 percent of the group, or 24 million, had credit limits cut despite no new negative information in their files. Lenders may have used information not in credit reports to decide whose credit limits to cut, FICO spokesman Craig Watts said.”
Really? Exactly what information would that be? The article goes on to say that about 27 percent of the 24 million had some history of late payments; but what about the other 73%? What’s really happening is that many of the credit card consumers who suffered from credit limit cuts were inactive credit card users and/or paid their bills in FULL each month, thus paying no interest, which translates into no profits for credit card companies. In other words, these credit card consumers who pay in a timely manner and pay no interest because they don’t keep a balance are punished for their behavior. Their credit limits are reduced, which is dangerous because it can reduce their debt to credit ratio and ultimately lower their credit score. And that’s not fair.
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
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- Jacob Decker
