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"Credit card provider slated over enticing customers to get into debt"

By admin | January 31st, 2009 | Credit Cards

A credit card company was recently slated by industry officials for trying to encourage customers to take out cash on their credit cards in the run up to Christmas.

Using credit cards can be expensive at the best of times, but when used to take money from a cash point machine an increased interest rate and charges are applied to the balance, putting the borrower in even more debt.

According to reports MBNA tried to entice borrowers into using their credit cards to take out money to splash out on themselves in the run up to Christmas, playing on the fact that many were struggling financially after a difficult year and may have been more easily swayed to take this expensive step.

The lender was found to have been sending out letters to some of its customers, increasing their credit limits and encouraging them to take money out on their cards.

The letter read: ‘As one of our best customers we’ve recently increased your credit limit to £11,200. This means you can withdraw more cash this Christmas to really splash out on yourself and your family.’

It also read: ‘Simply by visiting the nearest cash machine displaying either the MasterCard or Visa logo you can get access to cash whenever you need it.’

One official stated: ‘Particularly in the current climate, it is breathtaking that MBNA is actively encouraging customers to take cash out on their credit cards. This is an extremely expensive way of accessing money and often indicates that a customer is in a poor financial situation because they don’t have any alternatives. It is also completely inappropriate to raise credit limits without consulting the customer first.’

Tags: MBNA credit cards

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