• NPR Morning Edition, Wednesday, April 8, 2009 10:30 AM

Acting on informed hunches about where unemployment may strike next, credit card companies are cutting the limits of some of their better customers, Larry Abramson reports. Most lenders told the Federal Reserve in the most recent survey they are tightening polices for credit cards and other consumer loans.

David Robertson, publisher of the Nilson Report, says companies are using unemployment and foreclosure reports to predict which borrowers in which parts of the country will run into trouble in the near future. "They're trying to determine who the customers might be who today look perfectly good -- able to pay their bills -- but 60 days from now will unfortunately be out of work," Robertson says.

Nessa Feddis of the American Bankers Association says there's another force at work: Lenders are still having a hard time raising money from investors, so they have less money available for consumers to borrow. "Because of the increased risk that the loans won't be repaid, the investors are either demanding to be paid more for the increased risk or they're not lending money at all," she says.

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