Released: September 02, 2007

Even low-risk borrower suffering

Source: Eileen Ambrose, Baltimore Sun (Free Registration)

Now that homeowners can no longer easily use their homes as ATM machines, they are turning back to credit cards.

The latest figures from the Federal Reserve show that consumers increased their amount of outstanding revolving credit - mostly credit-card debt - by $6.3 billion in June for a total of $904 billion. That’s on top of a $9 billion increase the month before.

But cardholders beware. Card issuers, like other lenders, are now sensitive to problems in the beleaguered mortgage market and unlikely to give much leeway to consumers who start appearing risky. You may suddenly find your interest rate rising or your credit limit reduced.

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