According to an article in the Boston Globe , credit card companies will reduce lending by more than $2 trillion over the next 18 months. Prompted by rising credit card loan defaults, credit card companies want to take less risk and lend less money to even fewer debtors. In an environment where consumers are spending less and facing job losses, pulling back on credit card lending is an unprecedented move that may be dangerous for an already fragile economy.
The economy has already lost over 300,000 job in November and this move by credit card companies just seems like another nail in the coffin. Many families depend on credit cards to stretch their meager earnings and as income in case of emergencies such as unemployment or unexpected medical expenses. Pulling back on the availability of credit now may cause our economy to come to a standstill. Anyway, what happened to the billions of dollars giving to these companies to "unfreeze credit"? We need to begin holding them accountable and demanding to see results.