Less Power to Purchase

Delinquency rates are also up. Capital One, for instance, reported that delinquencies jumped to 4.2 percent in the third quarter from 3.85 percent the previous quarter and from 3.8 percent a year ago.

Even lenders who cater to more credit-worthy borrowers have suffered losses. American Express wrote off 5.9 percent of its loans in the third quarter, up from 5.3 percent in the second quarter and 3 percent a year ago.

"Cardmember spending is likely to remain soft" into 2009, Kenneth I. Chenault, chairman and chief executive, said in a news release. "Loan growth will be restrained, in part because of the steps we are taking to reduce credit risks, and credit indicators are likely to reflect the continued downturn in the economy and throughout the housing sector."

The numbers have spooked lenders into withholding credit. Major issuers, such as Bank of America, have said they have raised their standards for granting cards. Stephanie Jacobson, first vice president of public affairs for Chase Card Services, said the company has increased its credit-score cutoffs for direct-mail marketing. "As leading indicators began to change in early 2007, we adjusted our risk-management policies and procedures to better manage potential losses," she said.

Fewer consumers are now getting courted. According to Mintel Comperemedia, a marketing research firm, 1.34 billion credit card direct mail offers were sent out in the third quarter, down 13 percent from the previous quarter and 28 percent from a year earlier.

A Federal Reserve survey of lenders, released last week and conducted last month, found that 50 percent had raised their minimum required credit scores over the past three months, which prompts the question: What makes a customer desirable these days?

"This is a moving target because the most credit-worthy a year ago was someone with a 700 FICO score. Now it's more like 730," said Curtis Arnold, founder of CardRatings.com.

Lenders are now increasingly considering factors beyond late or missed payments. Some are looking at geography and shopping behavior as well. If you live in an area with a high foreclosure rate or shop at stores that risky borrowers frequent, don't be surprised if your line is reduced or your rate goes up.

"Among other factors, we do look at mortgage information and geography where there has been a greater deterioration in home prices. Those are some other factors, but again, we're looking at the entire credit profile," Lisa Gonzales, manager of public affairs for American Express, said of credit line reductions.

"We have taken actions such as lowering credit limits, adjusting rates, tightening credit standards and closing inactive accounts, particularly in certain geographies and where we can use mortgage data to enhance our decision-making capabilities," said Jeanette Volpi, vice president of public affairs for Citi.

Reducing credit lines, in particular, has wreaked havoc on many consumers by affecting their debt utilization ratio, which is the percentage of available credit they are using. A high debt utilization can lower a credit score, which then makes it tougher to get credit or at least get credit under favorable terms.

Joanna Fridinger, owner of a limo company in Baltimore, found herself feeling the wrath of American Express. She had a credit limit of $19,500 on a card she had gotten in 2004 and, she said, faithfully paid on time. But a dispute with Macy's over a broken vacuum she bought on credit dinged her credit report. She said she refused to make payments on the vacuum and was hit with a late fee.