The End of Easy Credit

· Once you've verified, check to see what your utilization rate is on each card and then on all the credit cards together.

The credit-scoring algorithm looks at the credit utilization rate for each active account and, separately, a person's credit usage for several accounts together. So let's say you have four active credit cards, each with a credit limit of $5,000. Three of the cards have zero balances. The fourth card has an outstanding balance of $4,000, which means you have an 80 percent credit utilization rate on that card. Being that close to maxing out on just this one card will hurt your credit score. You may also see your interest rate rise because you're closer to your limit.

However, your overall utilization for all four cards is just 20 percent, which is good.

· If you can't pay off the debt every month, at least pay it down. If you are using more than 30 percent of your available credit balance on any one card or on all of them together, you could see a significant drop in your credit score.

In the Federal Reserve survey, about 50 percent of banks reported having raised minimum required credit scores on credit card accounts in the past three months. If your credit score drops, you may lose your status as a prime borrower.

Your issuer may raise your interest rate. And you may not be able to find another card with a lower rate. Fewer companies are offering juicy credit transfer deals with low interest rates or zero percent interest.

· To avoid missing any notification about your credit account, see if your issuer provides an e-mail or mobile notification of changes to your account or when you may be nearing your limit. This will allow you to keep track of your credit utilization and avoid having that embarrassing moment when your card is declined. Or worse, face a rate increase.

I know tightening credit standards and lower limits aren't welcome news for retailers as we head into the holiday season. It doesn't help the macro economy, which has become greatly dependent on consumers purchasing with credit.

But the end to easy money is necessary for individual households even if it's not good for the next president or the economy.

· On the air: Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" program and athttp://www.npr.org.

· By mail: Readers can write to her at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.

· By e-mail:singletarym@washpost.com.

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