Credit Card Crunch

(KTRE) - Credit card debt, most Americans have it.  In fact, the average American carries more than $9,000 of credit card debt and growing.

America's outstanding credit card bill is past $800 billion and that huge number is a major reason for consumer debt issues.  Experts recommend paying off your credit-card balance each month to make it easier to keep an eye on your balance.  Also, having only one card makes it much easier to keep track of the rules and allows you to avoid the paper chase of multiple cards.  Both practices also make it easier to manage your credit cards.

So, how many credit cards do you have?  Do you even know their limits?  The instability in the credit market has forced many credit card companies to rollback the amount of money that you can borrow, which means if you don't have control of your credit, you could be in store for a reality check.

Joe Pytko had a very specific use for his Sam's Club credit card.  "We use the card for gas purchases and emergencies."  A simple and responsible use for the card.  Joe never had a problem, until the beginning of October. "We went to use it and it came back card invalid."

After a bit of research, Joe learned that his credit limit had been lowered from 600 to 240 dollars. "They said we were not economically viable."  This despite always paying the balance each month.

George P. Kite, Vice President of Call Federal Credit Union, said the problem isn't with Joe

"Most of the big lenders were in the habit of throwing credit toward anyone who could sign their name."

And, that habit let to huge defaults that in turn sent that credit market into a tailspin, which left credit worthy people, like Joe, with much smaller limits with which to work.  "We're finding lenders and insurers, card insurers reigning in those credit limits because they are scared of the uncertainty going into next year," Kite said.

And while this crunch is impacting people like Joe who have otherwise used credit responsibly, it may end up being a good thing for everyone in the long run.  "For Americans, this is pretty much a wake up call.  It all goes back to needs versus wants, all of us could us a good reminder lesson as to what is a necessity and what's not,"  Kite said.

So, here's your reality check, keep an eye on all your balance limits and don't get stuck in an emergency and not have the credit to handle the situation.