Consumers outraged by credit card cuts : Credit Card Guide

Consumers outraged by credit card cuts

Many credit card customers have been outraged after discovering that their credit card providers have slashed their credit limits without any warning.

As part of a nationwide operation many credit card firms are trying to cull credit limits in the wake of the global credit crunch, and as a result of this many customers have seen their credit limit slashed to just £100 above their existing balance. No prior warning was given about the credit limit cuts, which has left many cardholders feeling angry and humiliated after trying to use their cards.

One solicitor who had his limit cut from £5000 to £700 said: 'I had to endure the humiliation of having it declined twice in B&Q. There was a long queue behind, I was embarrassed, but luckily had other cards with which to pay it. I have had the card for 10 years and, surprise, surprise, I've never missed a payment and always paid off the balance at the end of the month. But what really made me angry was that after I asked them why they didn't give me some notice, they said that if they did that, I could just rush out and spend wildly in an effort to keep my balance up. I found that incredibly insulting.'

Although the process has been used by a number of different banks, all have used the same procedure of cutting the limit to £100 over the existing balance. Banking officials stated that the reason that customers were not informed of the move was because they would have then had the opportunity to go out and spend on the card in order to increase their existing balance, and subsequently increase their credit limit.

Many of the customers that have been affected by the move have stated that they have good credit and have not missed repayments, as was the case with many of the Egg customers that recently had their credit card facilities withdrawn.

Tom Smith
26th March 2008

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