Do you know the limit on your credit cards? Are you sure? A number of banks are dealing with the tough economic times by reducing their cardholder's credit limits.

Greg McBride, senior financial analyst at Bankrate.com, says if the bank lowers you credit limit, "It can have a dramatic impact in the short term."

And here's why:

"One of the components of a credit score is your debt to available credit ratio," he said.

"That's basically how much of that credit line are you using? If the card issuers reduces the amount of your credit line, all of a sudden that $3,000 balance you had on the card is chewing up a larger amount of your available credit, that's one of the key components of your credit score."

A lower credit score can hurt you when you apply for another loan. It could also impact the interest rates other creditors charge you.

"If they cut back that credit limit all of a sudden, it looks like you're using more of that available credit and it could negatively work against your credit score, even though you hadn't put an extra dime on that card," said McBride.

If you happen to miss the fact that your credit limit is lower, you could continue to make charges and exceed the new limit without knowing it.

"If that happens you could find yourself socked with an over-limit fee on the order of $39, plus the issuer could then raise your interest rate into the punitive territory, something north of 20 percent."

So you need to check your monthly statement to make sure you know the credit limit.

Along with credit limits, credit card rates have also taken a dip.

About a year ago, the interest rate on the average variable rate card was 14 percent. Today, it's around 11.25 percent. But McBride says a lot of people haven't seen their interest rates drop accordingly.

"If you haven't seen anything of the likes of that and yet you have good credit - you pay your bills on time, you keep your debt low - it's time to start shopping around," he said.

There are a number of Web sites that make it easy to compare credit cards, including Bankrate.com, CardRatings.com, LowCards.com.

Lowcards has a new interactive credit card index that lets you compare every card in the country. You can sort the information a number of ways, such as by interest rate, annual fee or grace period.

More Information:

Bankrate.com

CardRatings.com

LowCards.com