Credit crunch hits cards too

NEW YORK (CNNMoney.com) -- This credit crunch isn't limited to mortgages. Consumer products from home equity loans to credit cards are getting more expensive and harder to get. Here's what you need to know.

Banks are tightening lending standards for auto and home equity loans. JP Morgan Chase is offering 90 to 95 percent financing for the loans, compared to a maximum of 100 percent financing earlier, said company spokesman Tom Kelly.

The bank has also been tightening up credit guidelines for consumers who live in areas hardest hit by falling house values like those in California, Colorado and Michigan. USAA Savings bank is also reportedly increasing credit-score requirements across credit cards, and auto and personal loans.

Credit card issuers began tightening their standards about three years ago, according to Robert Hammer of R.K. Hammer, a bank-card advisory firm. The changes may be subtle, but they're significant, says Curtis Arnold of Cardratings.com. Many are shrinking introductory rate periods - typically six months - down to something more conservative.

"Now consumers may not know if they're getting the introductory rate at all," he says. Some credit card companies are also increasing the interest rate on cardholders.

Credit limits are being cut, says Hammer. The average credit limit is $6,000 and some people will have these limits reduced to $5,500 or $5,000. Some subprime cardholders may even have a credit limit of only a few hundred dollars. Automatic extensions of limits are also becoming less common.

Credit card companies are also pickier about the customers they want. In the past, someone with a 680 credit score could have gotten a certain type of card. Today, that person will need a 690 or 700 according to Hammer. In fact, the approval rating is at 35 percent, that's down from a 50 to 60 percent approval rating just a few years ago.

You need to stay extra vigilant these days. Monitor your credit card statements. If your credit line is cut or your interest rate is increased, you'll get a letter in the mail from your credit card issuer.

Try to stay within 30 percent of your credit card limit. If your credit line is lowered and you go over the limit, you could be hit with default pricing that could boost your interest rate 24 to 32 percent. If your interest rate on your card did change, you are supposed to get a letter within 15 days.

At this point you may have the option of opting out of the interest rate hike. You need to do this in writing. Generally this means you'll have to give up the card. As usual, pay attention to the fine print - and watch out for the words "as low as" and "up to" in ads.