Banks Slammed as Irresponsible Over Credit Limits
Despite the credit crunch, a new survey claims that many Brits are offered credit card limits of £20, 000 or more, with disregard of any current debt.
New research by Moneysupermaket.com claims that UK citizens could spend a huge £253.6 billion on their credit cards this year, even though most Brits in the UK are worried over how much they owe.
According to the study, around four million Brits are offered £20,000 or more in credit, even though the UK as a whole owes around £55.6 billion on our credit cards. The study claims that we could borrow up to £198 billion if we chose to max out our cards.
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“The fact people could blow a quarter of a trillion pounds is alarming,” says Steve Willey, head of credit cards at moneysupermarket.com.
Willey claims providers should take into account a person's total potential debt when they apply for credit cards, to prevent potentially catastrophic debt in the future.
“It's all well and good to give someone a £5,000 credit limit if they can afford it, but huge potential problems occur when that one person is given cards by many different providers each with a £5,000 limit,” adds Willey.
The study claims that people in South West England are offered the most credit compared to people in Wales. Credit limits also varied between age groups in Britain with 12 percent in their sixties offered £20, 000 or more, whereas only 4 percent of people in their twenties were offered the same credit.
Willey claims however:
“Some providers are acting responsibly by refusing applications due to a person's total credit limit on all their cards, but others are still assessing things as though that person doesn't have another card.”
Willey highlights that many countries only give their customers a new card on the condition that they close another card with a separate provider.
“This is something the banks or Financial Services Authority need to consider,” says Willey.
Willey claims that most credit card users are acting sensibly by not spending the maximum credit on their cards, however “many banks aren’t.”
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