Have Your Wings Been Clipped?

Is your credit card crimping your equipment purchases?

We can talk about fiscal crisis and bailouts and subprimes and credit swap defaults derivatives and how they might affect tech sales and companies all day long, but I suspect you didn’t come here to read that.

Instead, let’s talk about something a lot closer to home: credit card limits.  Paypal notwithstanding, it’s harder to buy something online if you don’t have the credit card and credit limit to buy it.   This is just as true whether you pay your entire bill every month or not, whether you use a credit card as a means to borrow money or just to spend it.  

There’s been more than a few stories the last few months about credit card companies slashing credit limits to its customers, and this is a trend that seems to be accelerating.  What you may not know is that this action, even if it cuts off credit you’ve never used, can substantially lower your credit score, making it more difficult and/or expensive to get additional credit or loans down the road.

We’re not going to get into the merits and demerits of cutting back credit card limits when they’re used as a borrowing mechanism, but this also clips the wings of those who are merely spending money they already have.  If you can’t spend money easily at a place, you’re less likely to spend it there, or maybe spend it at all.  Yes, there are means by which you can have your bank balances debited, but that requires you to go through the rigamarole of setting it up, and the seller to go through the considerably greater rigamarole of accepting it.  I recently witnessed someone trying to make a small purchase at a very well known online store using his much larger Paypal cash balance, and it was ugly. 

But what about you?  Is this an issue for you, or not?  Have you had a credit card company or companies clip your wings lately?  Has it caused you problems buying equipment (or anything else)?  Have you been using other means to pay for your stuff, and if so, how has that worked out?  Any helpful hints?  Since this is a heavily international audience, is this phenomenon a U.S. thing, or is it more than that?

Leave your comments in the comments section, or if you don’t feel comfortable with that, you can always email me. 

P.S. If you’re not having the slightest problem at all, don’t feel like you have nothing to say.  It’s just as importance to hear “No problem” in a case like this than to hear “Big problem.” 

Ed