A Recipe for Right-Sizing Credit Facilities

Consumers are turning to credit card lines in record numbers as a way to help manage debt and add to interim cash flow. In turn, major creditors are readying themselves to mitigate the potential higher risk in cards by reducing unused credit facility. But credit facility management is a tricky business, as witnessed by recent media headlines such as "Lenders slash credit for responsible borrowers." This paper will discuss: The costs and potential gains of credit facility reductions Five critical areas for success Considerations for selecting reduction targets and amounts