Credit card providers give out £8.8 billion in unsolicited credit

In the last year, 5.7 million people (19%) have had their credit card limits increased without their consent, according to a new report from uSwitch.com

The average increase received was £1,538, pushing these limits from £5,129 to £6,667 and increasing the average interest bill from £800 to £1,040 per year should they chose to max out using the new limit.

However, while an increased limit could prove to be an unwelcome temptation, 3% of credit holders received a nastier shock in the last 12 months when their credit limits were slashed without their permission.

Overall, nearly a third (31%) of credit card customers have seen their credit card limit move in one direction or another over the past 12 months. In comparison, 13% actually approached their provider to request an increase to their credit limit and just under a third of these (4%) were rejected.

Louise Bond, personal finance expert at uSwitch.com, comments:

“In the current climate you could be fooled into thinking that increasing credit limits without permission is a good thing as it stops people going over their limits and incurring extra charges. However, the issue is far more complicated as providers are taking away consumer choice by throwing extra credit at people without their consent. There is also a question mark around how these people are selected for an increase or decrease to their limit and if this in itself is in the customer’s best interest.”

“Unless you are one of the 68% of consumers that regularly pay their credit card bill in full, keeping high levels of debt on interest bearing credit cards isn’t advisable as it’s an expensive form of borrowing. In most cases, providers really aren’t helping consumers by throwing cash at them as it could be placing unnecessary temptation in their path.”

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