After reading this from one my favorite personal finance blogs, I hurried to check my account. Same Account, and same results. Like Jonathan, I have kept the Washington Mutual account because I find the credit scoring useful. The account is otherwise pretty much useless for me. I don’t earn any rewards, nor does the account have a great APR (not that I keep a balance). Given the comments on My Money Blog, and the cancellations amongst my friends, Wamu has clearly decided to cut off many of it’s “customers.”

Personally, I don’t blame them. Given the current credit environment, why would any credit card company want potentially risky line of credit out in the ether? Even though the accounts are unused, it still cost something to service these unused accounts. Washington Mutual has spent at least a few dollar, mailing me new cards. More importantly, these lines of credit represent potential risky liabilities. Why would someone start tapping a credit card they haven’t used in a year? The best reason would be because they’ve run out of credit on their other cards. If I were in desperate situation that’s certainly what I’d attempt to do to stay afloat.

The problem of course if someone is tapping every line of credit, that person is not a good financial risk. Washington Mutual doesn’t have the option later that such person is a bad credit after he or she has already charged $3000. What they can do now is to cut out all the tumors many of which are benign (like myself and Jonathan) instead of waiting and finding out which ones are actually malignant.

What’s happening to people personally is very similar to what’s happening in the corporate world with more dire consequences. Banks have withdrawn lines of credits, and many companies who depend heavily on the ability to borrow have found themselves in situations where they can’t. While I may personally be miffed that I don’t have a free credit score anymore, I didn’t need the line of the credit to expand business. Corporations are not so lucky.  The economic pain of credit tightening is here and very real.   We won’t even feel the full effects until many months later.