Analyst sees credit-card limits cut by $2 trillion, but devil's in details

<span style="font-size:small;">&quot;Analyst sees credit-card limits cut by $2 trillion, but devil&#39;s in details&quot;</span> If you haven&#39;t yet had your credit limit slashed on one of your credit cards, it&#39;s highly likely you will -- if Meredith Whitney is right, that is.<br> <br> Whitney, an analyst and managing director at Oppenheimer &amp; Co. who predicted the current financial-services industry meltdown, now says credit-card issuers will eliminate more than $2 trillion in available credit over the next 18 months.<br> <br> Already, lenders have cut back on available credit due to their heightened aversion to risk and difficulty in funding loans. Before the financial crisis, consumer loans could be sold on a secondary market and the proceeds could help to spur more lending, but that market has largely dried up.<br> <br> Whitney warns that new accounting rules that will force lenders to record outstanding credit-card loans on their balance sheets, combined with the Federal Reserve&#39;s expected changes in credit card regulations -- including limiting lenders&#39; ability to raise rates on consumers&#39; existing debt -- will prompt them to cut access to credit lines even more.<br> <br> &quot;Restricting lenders&#39; ability to reprice an unsecured loan will cause them to stop lending or to lend less,&quot; Whitney said in a recent opinion piece in the Financial Times. Whitney was unavailable to comment for this article.<br><br> To the degree that limited access to credit dampens consumer spending further, that could severely hinder an economic recovery.<br> <span style="font-size:small;">&nbsp;See more information at:</span><span style="font-size:small;"> http://online.wsj.com/article/SB122876027803388535.html</span><br><strong>Join <a rel="nofollow" target="_blank" href="http://dailylifeonline.lefora.com/forum/">Daily Life Online Forum</a></strong><br>