Card firms take it to the limit: Companies blasted for 'irresponsible' lending
CREDIT card companies have been blasted for “irresponsible” lending practices that are luring millions into taking on extra debt.
Credit card companies have been blasted for 'irresponsible' lending practices
Almost 20million credit cardholders have had their credit limit increased by their bank without them requesting it or granting their permission.
Of these, around 4.5million were tempted into taking on more debt as a result, according to new research from comparison site uSwitch.com.
It comes at a time when Britons are already taking on unsustainable levels of debt, which have now hit pre-financial crisis levels.
Almost 20million credit cardholders have had their credit limit increased
The average unrequested increase is £1,300, but more than one in 10 have seen over £2,500 added to their credit limit.
These increased limits are often unrequested
Cardholders can refuse a credit limit increase within 30 days of being informed by their issuing company.
Yet six out of 10 had no idea it was their responsibility to contact their card company and refuse the increase if they didn’t want it.
Tashema Jackson, money expert at uSwitch, said millions of cardholders risk taking on more debt as issuers effectively offer them “free” money in the short term.
It comes at a time when Britons are already taking on unsustainable levels of debt
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“These increased limits are often unrequested, unwanted and a surprise.”
With household debt on the rise, card companies shouldn’t encourage customers to bite off more credit than they can chew, she said.
Jackson called for City regulator the Financial Conduct Authority to ban providers from raising credit limits unless requested by the customer.