Card companies cut credit limits

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Card companies cut credit limits

Mon 7th Apr 2008

Some 1.8 million credit card customers have seen their credit limits reduced in the last six months, allowing card providers to save around £3.1 billion worth of credit, according to MoneyExpert.com

The website found that on average, credit card companies reduced their customers' limits by £1,600. It revealed that young borrowers are most at risk of having their spending limits cut, with six per cent of 25 to 34-year-olds reporting that their supplier had reduced their allowance.

Sean Gardner, a spokesman for the company, warned that more cuts are likely to follow as credit card companies seek to minimise risk.

He also suggested that customers should not use credit cards to paper over "serious financial cracks", as they are not a long-term solution.

"Credit card companies are becoming stricter in who they lend to and the amount of money their customers can borrow," he added.

Last month national money education charity Credit Action advised consumers to research the market carefully before deciding on a credit card.

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