Do you have available credit? Maybe you're not using your credit cards, but you keep them around just in case cash flow gets tight - like if you're laid off in a weak economy. You may think of those cards as a safety net, but you might want to reevaluate.
There's no safety net like cash. Why? Credit lines are getting cut as a result of the financial crisis. Lenders want to reduce risk, so they'll reduce the amount you can borrow. This applies to home equity lines of credit, credit card limits, and other types of loans.
Marketwatch.com expects more than $2 trillion in available credit to evaporate over the next 18 months. That means your $10,000 credit limit might become a $2,000 credit limit overnight.
Credit Essentials:
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