Look, credit is not a birthright, and unsecured credit – which is what the credit card companies offer – is high risk for the lender. They used to price on risk. While I personally don’t use revolving unsecured debt – if you decide to get into that game you need to understand that it’s no joke – it’s a tough business and the players in it are in it to make money. They will return to a blended risk model – and will work out a way to move the 30 billion in fees they used to get into interest charges.
In the end, figure 17% average APR, NO MORE rewards and $30 to $50 a year fee per card. Expect this by the middle to end of 2011.

Is this so bad? I don’t think so – as it makes credit available – but expensive – making it more of a considered decision and making people think more about what they can actually afford to buy and why they are buying.

On the credit card topic…we recently lost all 3 of our cards. Accounts closed due to inactivity. It is nice not having credit card debt but plain weird not having any credit cards.

WRT the orginal post – I recently applied for a new rewards card (Schwab 2% cash back) and was a little suprised at the diligence they did (and I have an 800+ FICO). Although I was suprised (and a little put off by all the questions etc.), I find it encouraging that lenders are starting to actually do their jobs again. I just hope the pendulum doesn’t swing to far.

I just got a letter from Discover yesterday telling me my account was cancelled for inactivity. My parents also recently got a letter cancelling one of their cards for inactivity (they have zero debt and rarely even need a credit card).

Yes, I need to develop a better strategy for eliminating my credit card debt, but the credit card companies are just making things harder for people who really are trying to do the right thing. JMO.