If you use a credit card, be careful where you shop.  If you want to keep using that credit card you’d also better be careful in picking a mortgage (assuming, of course, that you can get one).

Banks and credit card giants like American Express are expanding the criteria they use to determine how much credit, if any, they will give to customers.

Reports MSNBC:

As the global credit crunch reaches from Wall Street to Main Street, guilt by association has become a tool for evaluating the creditworthiness of American Express customers.

Among other criteria, cardholders are seeing limits reduced because of where they live, where they shop and who holds their mortgage.

“Absolutely unbelievable!” said Jesse Gilleland of suburban Washington, D.C., who says revisions of his American Express accounts and credit limits, at least partly for those reasons, could force him to close his once-thriving computer-consulting firm.

A letter sent to Gilleland by American Express, one of the nation’s largest credit-card issuers, includes these reasons why the spending limit on his Platinum Card was reduced:

Our credit experience with customers who have made purchases at establishments where you have recently used your card.”

Our analysis of the credit risk associated with customers who have residential loans from the creditor(s) indicated in your credit report.”

Credit-card experts and consumer advocates say that while such practices have been rumored for some time, this is the first time they’ve seen them cited as criteria for a credit limit reduction.

When banks lower credit limits it also affects your credit score.

The latest victim of the lending crisis could be your credit score.

Even if you haven’t been directly affected by subprime mortgage problems, your score could take a hit.  That’s because new research says a majority of credit card lenders are lowering credit limits to reduce their risk in the wake of the credit crunch.

When a customer’s available credit goes down, for any reason, it brings the current balance closer to the limit. That can lower the consumer’s credit score substantially.

Why? A key component of credit score calculations is the ratio of used credit to available credit — the "utilization ratio." About 44 percent of cardholders carry a balance at least occasionally. For them, any reduction in credit limit lowers the ratio, lowering their credit scores.

"It’s quite an issue," says Linda Sherry, director of national priorities for Consumer Action. When the organization conducted a recent online poll, 11 percent of participants reported they’d had credit limits lowered in the past six months. "It shows us that something is definitely going on out there."

Using a credit card at a "rent to own" store can also affect your credit rating. The MSNBC report continues:

Ed Mierzwinski, federal consumer program director with the U.S. Public Interest Research Group, said, “There’s no question that this type of behavioral score is used by everyone. They just don’t like to admit it. … It sounds like American Express is dialing up the impact.”

For instance, Mierzwinski said, “For years, you’ve been dinged if you purchased your stuff at a rent-to-own store on your credit card. The ding used to be very small. It sounds to me like they’ve dialed up the ding.”