Note: This post is way off topic, but important enough I felt I should share.

Recently many credit card issuers have started to pull back credit lines and do other things to cause consumers to payoff or close accounts. I've seen this in my own life. Several cards have cut my available credit limit or raised my interest rate. My American Express now has a spending limit, where it had none before. After one issuer cut my limit by over $4,000 I got an offer to pay off the balance and get a 20% reward on every dollar over the minimum that I paid in the next three months. The other side of that is that they would then further reduce the credit limit by an amount equal to the "reward" subtracted from my account balance. Then of course, I've noticed that the flood of credit card offers I used to get has dried up completely. It's been months since I've seen one in the mailbox.

I am not arguing with credit card companies trying to shield themselves from being over-extended by cutting unused credit lines. In this climate, it is actually a GOOD thing that my mailbox is no longer full of credit card offers and that the companies have finally come to their senses and cut unused credit lines to protect themselves and their existing good customers from a wave of defaults as the nation continues to buckle under the foreclosure epidemic. Part of this entire mess was far to much use of credit by Americans and a complete lack of prudence by the banks/credit companies is offering loans to everyone and their brother, job or not.

On the other hand, having your credit lines cut can drop your credit score pretty drastically if the new limits weight your debt-to-available-credit-ratio into negative territory. So, as in all things financial, you need to look out for yourself.

The newest twist on this is almost sickening. Some companies are starting to cut the limit BELOW what is currently owed on the accounts and then continuing to cut limits as the balance is paid down. They are also piling on the late fees and over the limit fees on unsuspecting consumers. Congress is working on a bill to address lending practices, but as of now, there is no law to stop this practice.

All this adds up to an urgent need for consumers to manage their credit wisely and protect themselves from nasty surprises the next time they go to swipe the plastic.

Take away TIPS:
• MONITOR your accounts with an eagle eye. If you are not using your card issuer's online capability, it might be time to start. You don;t have to use it to pay the bill, just to monitor your account's interest rate and credit limit. These changes show up online before you get the letter in the mail, which can take up to three weeks to arrive.

• READ your statements carefully, especially for changes to your interest rate. Many companies are increasing interest rates even on good standing accounts because of reasons like "market conditions" or the desire to "maintain profitability" on accounts. Again, these letters can arrive weeks after the change has been made.

• Don't be afraid to speak up. If there are changes to your account that you do not agree with, call the company and try to get fees reversed, credit restrictions removed or at least an explanation. You may not be successful, but you will only get "no" if you never ask for a "yes" decision.

• Don't count on balance transfers to avert the damage from another issuer's decision. I think it goes without saying that the unused credit line you "think" you have on Card A may not be there when you need it.

• Leave the plastic at home. PAY CASH and PAY DOWN. You have almost no protection should your card company lower your credit limit or jack up your interest rate. If you are paying off your balances and not adding to the pile, should one of these happen to your accounts, the damage will be smaller if you are already in "pay off" mode. Besides, in these times, you should feel a cold shudder go down your spine every time you even consider adding any debt to your obligations.

• It all comes back to education. If your head is spinning with all these terms that are suddenly in the headlines, you are not alone. Learn more about the reasons we are in this mess with the fine folks at NPR's Planet Money and the extensive, plain english explanations at This American Life.

The Giant Pool of Money - learn about the roots of this mess and what started the cascade
Another Frightening Show about the Economy - The day the market died, hedge funds, credit default swaps explained and what's next
Bad Bank - Just what is a bank balance sheet and why are they all out of balance?

You can also read about the mathemetical forumla that killed Wall Street in this month's Wired magazine.

I am sure there are lots more of these resources. Do you have any sources for good plain english articles reated to the financial crisis? Please share in the comments below.

• Talk to your kids. Although explaining hedge funds and credit default swaps to your kids is probably not the route to go, don't wait for the school to teach your kids about how to balance a checkbook, what interest is and how it works, and how to be responsible with a credit card. Even kids as young as 5-8, need to undertsand that money doesn't just come out of the ATM in limitless supplies. Help your child learn wise money management NOW.

OFF THE SOAPBOX, now! Ok, back to our regularly scheduled crafting discussion :) Thanks for listening.