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"More credit card firms could cut limits to customers"

By admin | October 12th, 2009 | Credit Cards

An increasing number of credit card firms could end up cutting the credit limits that they are giving to their customers according to a recent report.

Over the past couple of years a number of credit card firms have already dramatically reduced the level of credit on offer to some of their customers, with some providers even cancelling the credit card accounts of some customers.

A recent report suggests that this is a problem that could get worse, despite the fact that some reports have indicated that the credit situation is easing up somewhat.

Figures have shown that credit card firms have by and large failed to cut their interest rates even though the cost of borrowing for lenders has been coming down. This is said to be one of the ways in which these companies are trying to shore up their finances, the other being reducing or cutting customers’ credit limits to reduce the risk of bad debt.

Officials from the Bank of England have said that credit scoring could continue to get tighter as a result of the way that credit card firms and lenders view credit risks, and that credit limits could continue to be reduced for customers.

One credit card giant, Barclaycard, has already recently said that it has been turning away around half of all applications purely on the basis that those applicants could face financial troubles in the future rather than based on them already facing financial problems.

The Bank of England also went on to state that none of the lenders that it had been in discussions with about credit cards made any mention that credit availability on credit cards was to be made easier for consumers in the near future.

Tags: credit card limits, Credit Cards

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