Consumer confidence at lowest point

01.28.09
By Sarah Beldo

With each day bringing a fresh spate of gloomy headlines, it may come as no surprise that consumer confidence is lagging.

New figures from the Conference Board reveal that confidence has sunk to an all-time low this month, as several economic indicators show no sign of a recovery any time soon.

Understandably, in preparation for tough times ahead, many Americans have replaced shopping and spending with paying off credit card debt and loans.

"Consumers are losing a pretty big chunk of their net worth right now," economic analyst Adam York told CNN Money, citing falling home and stock market portfolio values as evidence of that trend.

"It doesn't feel good and, as a result, consumers are spending less and they are worried about the outlook for the U.S. economy and their own personal situation," he added.

As uncertainties grow, it may be tempting to assume you can rely on your credit cards to help get you through a challenging financial situation, such as job loss.

However, be aware that the credit limits you have at the moment may not be set in stone. Over the past several months, banks have been looking for ways to protect themselves from risk - one method they are using is cutting customers' credit limits.

Consumer advocate Gerri Detweiler told the Chicago Tribune this is becoming a common scenario, even for those with a stellar credit score.

"Issuers are looking at their exposure and they are trying to make sure if things in the economy continue to get worse, they don't end up holding the bag," she explained.

Behaviors that may cause lenders to rethink your credit limit include paying late on a loan, running up larger balances than in the past, or suddenly changing to paying the minimum when you used to pay more.

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Americans are worried about job security and other economic indicators