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Concern over increases to credit card limits
One in five people have had their credit card limit increased without their consent during the past year.
Around 19 per cent of card users have received letters from their credit card provider saying they have increased their spending limit without them asking for it, with the average person seeing their credit limit rise by just over 1,500.
A further 13 per cent of credit card users have themselves requested a higher limit, with 9 per cent being successful and the remaining 4 per cent having their request rejected, according to comparison website uSwitch. com.
But 3 per cent of those questioned have had their credit limit reduced by their lender without them requesting it.
The group warned having a higher credit limit could tempt people to spend more than they could afford, leading to them incurring higher interest charges as they took longer to pay off the bill.
Its research found only 68 per cent of credit card users cleared their debt in full each month.
Louise Bond, personal finance expert at uSwitch.com, said: "In the current climate you could be fooled into thinking that increasing credit limits without permission is a good thing as it stops people going over their limits and incurring extra charges.
"However, the issue is far more complicated as providers are taking away consumer choice by throwing extra credit at people without their consent.
"There is also a question mark around how these people are selected for an increase or decrease to their limit."
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Saturday 11 February 2012
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