Kevin Walmsley

Tough Times for Card Companies - Barron's

Warhorse and MP--good comments.

I have a briefcase safe that I call my run-n-gun (it's used to contain a firearm, but no more. But I've kept the moniker). I have important insurance documents, a few thousand dollars cash, birth certs, etc. It's in case my house is burning down or there's a hurricane on the way, and I have time only to grab a couple of things and rebuild my life somewhere else.

Anyhow, I also had two unused credit cards in there, with $10k credit limits. And last month I got letters saying that they had been closed. I thought at first my identity had been stolen or something--I didn't recognize the account numbers, or the banks. Then it occurred to me that they had closed my run-n-gun credit card accounts, just in case I ever got the mind to use them, but at least now they don't have to maintain reserves against that possibility.

Six months ago, they would barrage my mailbox with offers to increase the limits, if only I would use it. Now they apparently feel that if I start buying stuff, I won't pay them back.

Not a good picture. The banks are running scared. Not only are they refusing new loans, they're busy closing up old ones.