Credit card limits cut for millions

The credit card limits for millions of cardholders in the UK have been cut recently, taking away an essential financial lifeline for many people that have become increasingly reliant on their credit cards. Many credit card firms have cut their customers’ credit limits, as they try and claw back more money in the current financial climate.

According to industry experts the credit card limit cuts have managed to get back around £5 billion for credit card companies, and the average amount by which the credit card was cut per card was nearly £2000. A number of credit card providers have been applying these credit limit cuts, and for many consumers these have come at a bad time, when they have become especially reliant on their cards.

One industry expert stated: ‘Overstretched borrowers are seeing their credit lifelines withdrawn. With unemployment on the up, card companies are looking to claw back debt quicker than ever before. It is not just those who have debt problems who are being targeted – there’s plenty of evidence that people with good credit records are being hit often because they don’t use their card enough as far as lenders are concerned.’

He went on to state: ‘They say they are being responsible lenders by cutting limits which makes sense for them as businesses but the reductions can be a massive shock for borrowers many of whom are being entirely responsible. While limits could be cut at any point, anybody relying on a credit card needs to reassess their finances.’