Dec. 3, 2008 -- As they trudge their way through this year's holiday season, some shoppers will be in for a surprise when they haul out their credit card.
Without even warning their customers, some credit card companies are slashing the maximum spending limits.
American Express, Bank of America, Citibank and Discover are among the major issuers who are lowering credit lines.
"Good Morning America" financial contributor Wendy Bounds stopped by the show today to explain what this could mean for the consumer.
Who's at Risk
"The first people in the line of fire will be those who have high balances, people who have low credit scores and are not paying off their bills on time," Bounds said.
But the pain is spreading to those with average or even good credit scores.
"Even those who are paying off in full, they are in the line of fire as well," she said. "The banks don't just look at the one card that you have, they look at your entire credit history. Having problems elsewhere? They know it. That could hurt you as well."
The Dangers of a Lowered Limit
According to Worley, credit companies lowering their limits can have two serious consequences.
"One, you could spend over your limit and you could get hit by fees," she said. "The first time this happens, you might be able to sweet talk them and say, 'I might not have known it was lowered.' Secondly, it can ding your [credit] score. So if you're refinancing your mortgage, this is not the time you want to learn you're having problems with [a] credit score."
What You Can Do
"These are good pre-emptive things to do," Bounds said. "One, try to keep your total credit card debt to 30 percent or lower of your credit limit."
Bounds also suggested monitoring your credit report for free with Web sites like AnnualCreditReport.com and look for errors.
"Be proactive on that front and ask your credit card company if they will notify you via an e-mail alert," Bounds said. "Some companies will do that if you approach your credit limit."
"When in doubt," she said. "Pay cash. That's one way not to overspend on your credit limit."