While many of us thought that we would never see the day, it seems as though the credit card companies are starting to feel the pinch.  Confirmation came yesterday that Barclay Card have been writing to a number of their customers actually reducing their credit card limits.  A big change from the constantly increasing credit card limits which we have come accustomed to in the past!

Even though the whole financial industry is still feeling the pinch, the depth of problems in the sector are reflected by this unprecedented move by a major credit card company.  As the finance houses limit the amount of funding to the public, this may perversely increase their earning and profits, with the chance of less (or smaller) client debt problems.

It will be interesting to see which other areas of finance are next to baton down the hatches and try and ride the storm.  The insurance sector may be an area which is ripe for some kind of credit crunch, with less funding available, there should be less competition for reinsurance offers.  This may mean a rise in reinsurance costs, which would then filter through to the public and higher premiums in due course?

Again, the financial press seemed to have swallowed the belief that the Northern Rock will be the only casualty in this credit crunch - that will not be the case.  It may takes months for the full impact of the situation to filter through, but there will be more casualties, although whether they will be as high profile as Northern Rock remains to be seen.