Credit Card Firms Drop Limits
Whether it’s because you’re too old, because you’ve lost your job or simply because you just don’t use it enough – your flexible friend may suddenly no longer be quite as obliging as it once was.
The financial squeeze is angering credit card holders as card companies peremptorily reduce their customers’ spending limits, leaving many with almost no credit with which to buy big-ticket items.
The triggers that result in limits being reduced range from card holders taking on other loans or suffering a drop in income, to their simply being too old, or to the companies wishing to reduce their exposure across a group of customers – and consequently the amount of capital they need to hold to fund those customers’ potential borrowing.
A year ago, internet bank Egg enraged customers when it stopped 161,000 of them from using their cards – with only 35 days’ notice. Egg said it wanted to reduce its exposure to people with poor credit records, but many irate card holders said they could see no reason for their plastic to be cancelled. Nevertheless, other banks and building societies have since followed suit.
If you have been a victim of this, please tell us about it
Category: News
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