There was a time when our mailboxes were full of credit card offers. Now the offers have been replaced with policy change notices.

Credit card companies are racing to make changes before the new regulations hit in February 2010. They’ve have had a bad couple years. It used to be easy to make money in the credit card business, but things have changed.

The first issue is defaults. Because of unemployment, more people are defaulting on their debts. So, credit card companies have been lowering everyone’s credit limits to help reduce the risk. Their reasoning is sound. The less debt you have, the less debt they will have to cover.  Expect your credit card limits to fall even if you have a good payment history.

The second issue is pay offs. More people are paying off their credit card debt because they’re anticipating layoffs. This means that the creditors are earning less from interest payments. They need risk-free revenue, so they’re looking at annual fees. Expect your credit card company to either add an annual fee or increase the fee you already pay.

Right now, under the old regulations, they can still make changes to your account with minimal notice.  If you get an unpleasant policy change in the mail, you should definitely call the credit card company and try to get them to revert back to the original terms.  If that doesn’t work you can always close the account.