You are here: Home - Credit Cards & Loans -

Credit card companies curb spending limits

0
Written by:
07/04/2008

Credit card companies have clawed back some £3.1bn worth of credit by cutting the spending limits of their customers, according to MoneyExpert.com.

The independent financial comparison website says around 1.8 million credit card customers have had their credit limit reduced in the past six months by their card provider, with the average reduction around £1,600.

The research is yet more evidence of the clampdown by credit card companies on customers who they fear may not be able to repay debts, and MoneyExpert.com is warning that more pain could be on the way.

Sean Gardner, spokesperson for MoneyExpert.com, said: “Overstretched consumers might look to resort to credit in a bid to make ends meet but they should not rely on it as a way of keeping spending.

“Credit card companies are becoming stricter in who they lend to and the amount of money their customers can borrow.

“The credit card market is competitive as people turn to interest free deals to tide them over some tough economic conditions. And there’s nothing inherently wrong with taking advantage of a 0% credit card for a year as long as spending is controlled.

According to the MoneyExpert.com figures, 4% of all British adults have had their credit limit cut in the past six months, amounting to around 1.8 million customers.

Typically customers who had their credit limits reduced saw their limit cut by £500 or less. And the MoneyExpert.com research shows that 47% of credit limit cuts are no more than £1,000. But with some 15% of those experiencing reductions having their spending limits cut by more than £2,500, the average reduction is £1,680.

Gardner added: “Our switching index shows that around 980,000 people switch credit card provider each month. With so many people needing credit to you have to wonder whether they are managing their money well or merely papering over some serious financial cracks.”

Tagged:

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Teenagers becoming shrewder with money

A report for The Children’s Mutual suggests that Britain’s teenagers are far more responsible with money than parents think.

Close