The company that handles NAC credit cards has cut off credit to approximately 14,000 customers in the Washington and Baltimore areas.

The customers affected have the smallest lines of credit and generally have limited access loans. The action comes as banks, finance companies and a variety of other financial institutions are tightening their restrictions on who may borrow, squeezing low-income and lower-middle-income families entirely out of the credit market.

Cut off from credit by the NAC move are customers authorized to charge only up to $300 on their NAC cards -- a group with a disproportionately bad record of paying bills, according to an official of the Citicrop subsidiary that operates NAC credit.

"We discovered that the people with the lowest credt lines -- who are 1.9 percent of the 770,000 people that we have on the books -- represented 44 percent of the write-offs," said Ronald E. Geesey, president of Citicorp Financial Inc. in Baltimore.

The letters, which began arriving this week, blamed the move on "difficult economic conditions now prevalent in our society, which Geesey said refers to inflation. With the price of necessities rising so rapidly, persons who previously might have qualified for credit on their incomes are finding it more and more difficult to repay debt, he said.

Of the 14,000 customers notified that they no longer may charge purchases on their NAC cards, approximately 6,000 with a history of prompt payment have been invited to reapply for credit, he said.

"Merchants have been informed of the closure (of the accounts) and will no longer honor the card," NAC wrote customers whose cards it was canceling. n"To avoid the possibility of future embarrassement, we recommend that you destroy the card."

Customers losing their cards were invited either to pay the accounts in full or make regular required monthly payments "so as not to jeopardize you record in local credit bureaus."

Geesey said the company had made its decision before the rising costs of money began to exert so much pressure on credit cards rates. In part the letters were an attempt to review the creditworthiness of customers whose financial circumstances might have changed significantly since the cards were issued, he said.

"Obviously you've got out there in that group some people who are perfectly good and perfectly credit worthy," he said. "Since we have a situation where these accounts were approved at old salary levels, we decided to write to those people and cancel their charge privileges but invite them to submit a new credit application," he said. c

Geesey said he is aware that at least one other company has taken similar steps, although he wouldn't identify it.

If other credit-card issuers follow suit, "where does that leave the low-to moderate-income person who is working, or someone like myself who, when I work, is paid well but who works sporadically?" asked one woman, whose credit was cancelled and who wasn't invited to reapply.

People who need the credit most will be cut off, while the higher-income bracket will continue to get credit," she said.