Credit card companies try to cull limits : Credit Card Guide

Credit card companies try to cull limits

A recent report has shown how the credit card industry appears to by trying to cull spending limits on credit cards, shocking cardholders by announcing a dramatic drop in their credit limit out of the blue. The report claims that many credit card customers, many of whom have very good credit, have seen their spending limits cut to £100 of their existing balance for no apparent reason.

It is further claimed that the customers were not actually told about the cut until it had been applied to the account, as credit card companies were concerned that if the consumer knew beforehand they would spend on the card so that their existing balance was higher. Consumers are now outraged after trying to make purchases on their cards before they were aware that the spending limit had been cut, and being humiliated because the transactions would not go through.

The customers that have been affected are from a number of different banks, but the same process if slashing the limit to just £100 above the existing limit has been applied. Those affected claim that their credit is perfect, just as many of the customers who had their credit cards withdrawn by Egg had stated that they did not have any problems with their credit.

One solicitor who had his credit card limit slashed from nearly £5000 to just £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.'

Tom Smith
6th March 2008

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