Lots of credit cardholders are increasingly getting another hit by major card companies, the reason being the necessity to make huge write downs to cover credit card and mortgage losses. This time, consumers are not experiencing a hike in the interest rates - that's a closed chapter already. It is the limit on their credit card that is being reduced, making the already tight credit less available.

Banks and credit companies are occupied with keeping default rates at their lowest so as to maintain their profits at a decent level. Thus, they've become choosier as to what limit amount each of their customers actually may qualify for. Keeping more money in house is now the key strategy of most major issuers. So, watch out and see how you could avoid being affected.

The greatest risk is faced by customers of Citigroup, Bank of America and American Express, the issuers of high limit credit cards with rewards. So, if you own one or more of their credit cards, it is high time you take measures against falling victim to their credit limit reduction practices.

First, however, it makes sense to learn what factors creditors look at before making their credit limit decision. It appears that the place you live in and the stability of your job are acquiring greater importance for the issuers.

American Express in particular is taking a closer look at whether you work in an area affected by the real estate crisis. If you do, it means for them that you are probably more vulnerable and inclined to defaulting on your credit cards.

While the practice of reducing credit limits may be considered by most consumers to be a penalty, American Express and other companies' representatives insist on the opposite. They put it as warn that a cardholder may go astray towards a debt abyss. Card providers claim that their policy is only intended to help their customers stay on the safe side.

However, while the credit limit cut is a positive thing for the creditor's finances, lots of consumers may find it to be distressing. Such people should know that a credit limit cut can be avoided and there are certain tips that could help do that.

All these tips can be summarized as "prove your creditor you're a no risk to their profits" but let's analyze each of them.

In the first place, pay your credit card bill always on time. Not a minute later or earlier. Continual late payments can give your company a green light to reduce your limit without eve a prior notice. Learn how to manage delinquent credit bills online.

Second, pay more than the minimum monthly payments. It'll prove your creditor that you have no financial problems and you're steady on your feet.

Then, avoid shopping aggressively for credit cards. Applying for two cards in one month can be regarded as a risky behavior and may get the creditor to think that you're in desperate need of more credit.

And the last. Do never use more than 50% of your available credit. This habit may pose you as fully dependent on your credit card, meaning that your income is considerably less than the limit you were initially approved for.

Following these tips may guard you from the credit limitation that may suddenly affect you any time. Remember, credit companies are only trying to keep you within the bounds of responsible credit behavior.

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