Credit card complaints have remained on a steady decline since the first major phase of the CARD Act was implemented in February. Nevertheless, consumers continue to encounter problems with their credit card companies, and no problem has loomed larger in 2010 than complaints about credit limit cuts.

Between the fall of 2008 and February of 2010, the majority of credit card complaints received and analyzed by Smart Balance Transfers focused on interest rate increases. The major banks, knowing they would no longer be able to impose any time, any reason rate hikes on consumers, began a massive interest rate increase spree that seemed to spare very few. The end result of this left a substantial portion of the credit card wielding population with interest rates as high as 29.99%.

Now, stripped of the ability to raise rates on existing balances, credit card companies are resorting to credit limit cuts as a key risk management tool. Consumer complaints and Internet searches on this subject have ebbed and flowed throughout the year, but have recently increased rather substantially.

One of the interesting trends among consumers complaining about credit limit cuts is their age. I began to pick up on this trend earlier this month and, after poring through 50 recent complaints, I noticed a few common threads that seem to indicate that baby boomers may be the specific targets of recent credit limit cuts.

What I’ve found is that a majority of consumers complaining about credit limit cuts reference long relationships (often twenty years or more) with the companies that are slashing their limits. Given the length of the relationships, it seems quite plausible that many banks are targeting baby boomers under the assumption that their income will soon drop when they retire. This may also be related to the difficulty individuals over fifty-five are having in the job market as well.

Ultimately, credit limit cuts are a much less severe and expensive punishment than 50% increases in interest rates. Nevertheless, these actions are hurting consumer credit scores and may be hurting the banks as they isolate longstanding customers.

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