• Credit card lines play a crucial role in the American economy because credit card debt is revolving – that is, consumers pay off their credit cards and use their credit lines repeatedly over time.
• The decline in home prices has been a better determinant of consumer behavior than FICO scores. In the past, credit card lenders were too reliant on FICO scores and the bulk of credit lines were extended when unemployment averaged below 6%. Hence credit card companies are reducing their credit lines significantly in the current economic environment. As lenders reduce credit lines based on where a borrower lives, trustworthy customers are put in a more vulnerable position along with bad customers.
• When one credit lender cuts a credit line, the credit card owner is perceived to be riskier by other lenders. Consequently, the other lenders also become more likely to cut the available credit lines.
• Upcoming changes in the Unfair and Deceptive Acts or Practices regulations will restrict the ability of credit card companies to reprise risk (in other words, increase interest rates as they see fit) and, as a result, may cause a further decrease of credit available to consumers.

Ms. Whitney acknowledges that credit was overextended in the past 15 years but she is concerned that taking away credit from trustworthy borrowers will weaken consumer spending, and consequently, the economy significantly.