Get free help preparing your taxes from AARP Foundation Tax-Aide. Find a location


You Could Choose Your Dream Vacation

Contests and

AARP’s Superstar
2015 Contest

Sing for a chance to win $5,000! Enter AARP’s Superstar 2015 Contest!
See official rules.

Driver Safety

Piggy bank on the road - AARP Driver Safety

Take the new AARP Smart Driver Course!

AARP Books

Visit the Money Section

Enjoy titles on retirement, Social Security, and becoming debt-free.

Jobs You Might Like

most popular


Ask Sid

A Lower Credit Ceiling Needn’t Cramp Your Score

Q. I've always paid my credit card bill on time and more than the minimum due, but like thousands of others, my spending limit was recently cut. How will this affect my FICO score?

A. Probably very little if you continue to be a diligent plastic user, says Careen Foster of FICO, the company that invented the credit risk score that lenders use.

FICO recently unveiled a study on how such cuts in spending limits affected the credit scores of cardholders with no previous "risk triggers" such as making late payments or exceeding their credit line. Between April and October 2008, FICO looked at about 32 million American cardholders who had no such black marks but had seen their credit lines reduced. The vast majority experienced only a small change in their credit scores—20 points or less.

Overall, Foster says, the FICO scores of those borrowers slightly increased—from a median of 768 in April to 770 in October. (Higher scores, generally 760 or better, qualify for the lowest interest rates on mortgages and car loans.) Only 4 percent saw their scores tumble by 40 points or more, while the scores of 6 percent climbed by 40 points or more. A study is under way to examine the impact of credit-line reductions since October, when the credit reins began to tighten even more.

For a stellar FICO score, in addition to paying on time and not exceeding spending limits, try to consistently pay more than the minimum—at least one-third, and ideally more than half, of your credit card balance.

Sid Kirchheimer writes about consumer and health issues.

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts


Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

The Cheap Life

Jeff Yeager Cheap Life Ultimate Cheapskate AARP YouTube web series save money

Catch the latest episode of The Cheap Life starring Jeff Yeager, AARP's Ultimate Cheapskate. Watch

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

membership benefit financial college aarp

Advice on saving for education from AARP® College Savings Solutions from TIAA-CREF.

AARP Credit card from Chase

Members can get cash back rewards on purchases with the AARP® Credit Card from Chase.

member benefit aarp financial service auto insurance

AARP® Auto Insurance Program from The Hartford offers members no-cost quotes.

Member Benefits

Join or renew today! AARP members receive exclusive member benefits & affect social change.

Advance your skills. Transform your career.

Explore your learning possibilities.