As of late, as a result of the economic meltdown—the increase in foreclosures, bankruptcies and defaults on credit card payments, financial institutions have tightened their lending standards and are feverishly working to reduce their risks. Even customers who have good credit are being affected. Joseph Onesta, a former employee of Consumer Credit Counseling Service of Los Angeles (now ClearPoint) relayed this story on his blog last week:

“I got a call [from my credit card’s issuing bank] wanting to review my current income status to re-adjust my credit limit. This is incredible. My income hasn’t changed. I always pay my bills early and if I don’t pay them off, I well over pay. They cut my limit–not using it anyway–by two thirds. Very funny. Not great for my credit score, but comical as we watch what happens in our society.”

Since the use of credit is the standard for many larger payments—from auto repairs, to renting a car to buying plane tickets, it’s wise to preserve our credit as best as possible. Today this task is more important and more difficult than ever.

The first step is paying down debt. Paying credit bills on time, keeping the total amount charged low, and increasing savings are similarly important. Since having one card makes you vulnerable to the decisions of that one company, rotating charges and payments between several cards provides a buffer in case one of your cards is closed or your credit limit is reduced so much that your card is rendered nearly useless.