Account balance is considered by banks to decide if you deserve a credit card

As banks look for ways to manage their risk amid surging loan losses, they consider consumers` banking relationship in deciding whether to approve a credit card or in figuring out how much credit to offer. Wells Fargo, Bank of America, JPMorgan Chase, Citigroup and Capital One say that this is only one factor in their underwriting, and they're also looking at traditional measures, including credit scores and consumers' payment history.

As a record number of consumers fall behind on their bills, this strategy is becoming more important for some banks. The Federal Reserve says that credit card delinquencies have hit a record of 6.5%, and charge-offs are near an all-time high.

Chi Chi Wu, an attorney at the National Consumer Law Center, says that under the law, banks can look closely at consumers' account balances only with their consent to offset credit card debts. According to Megan Bramlette, a managing associate at Auriemma Consulting Group, this information "helps them understand consumers' ability to repay their debt."

However, consumers may have accounts with multiple institutions, making it harder for banks to evaluate their financial health. Some consumer advocates are concerned about the trend, saying banks' focus on account balances could hurt those with small pocketbooks. Banks are also encouraging consumers to "put all their eggs in one basket" when they may be able to get better deals on separate credit card and bank accounts, says Ruth Susswein, deputy director of national priorities at Consumer Action, an advocacy group.