If you thought that credit was becoming harder to get, you’re not imagining things. And if your credit card issuer recently cut your limit despite a pristine credit history, you’re not alone.

The Fed just released its October 2008 Senior Loan Officer Opinion Survey on Bank Lending Practices which showed that banks have been progressively tightening their lending standards and have now begun to cut credit limits on existing credit card accounts even for prime borrowers.

Banks less willing to lend
Of responding domestic banks, nearly 60 percent indicated that they had tightened lending standards on credit card loans over the past three months. About 50% reported that they had raised the minimum required credit scores for credit card accounts during the same time frame.

Lower credit limits for all
In addition, the survey also revealed that 25% had lowered credit limits on existing credit card accounts to prime borrowers, while roughly 60% of banks had lowered credit limits for non-prime borrowers. Not surprisingly, no banks reported raising limits for non-prime borrowers. In both cases, larger banks were more likely to cut limits than smaller banks.

The reasons that banks cited most for reducing credit lines were: the less favorable and more uncertain economic outlook, a reduced tolerance for risk, a decline in customer credit scores and customers missing payments on their loans.

It’s clear that loan officers are jittery about the economy. Until banks begin to see that the times are getting brighter, you can expect these trends to continue.