Charity Slams Credit Card Firms for Lifting Limits for Struggling Debtors

August 30, 2017

Citizens Advice has issued stern criticism of credit card companies for automatically increasing borrowing limits for customers who are already struggling with debt problems they can’t escape from.

The charity’s own research has found that almost one in five people who are grappling with credit card debt problems have had their borrowing limits increased without request.

According to Citizens Advice, whose research relates to scenarios across the UK, the practice of automatically increasing credit card limits without request should be completely banned to better protect consumers.

Its figures suggest that while almost one in five (18 per cent) of struggling credit card users have had their borrowing limits increased automatically that figure is only 12 per cent among all credit card users.

Credit card debts are recognised as being a major source of problem debt for people throughout the UK and for many the issues can persist for years without being resolved.

Citizens Advice wants to see the issue of automatic credit limit increases addressed by regulators as a matter of urgency to prevent lenders from adding to the financial problems of people who are already finding it impossible to pay off their debts.

The charity has said that while 72 per cent of people with personal loan debt problems are able to reduce their arrears within two years, that figure is only 60 per cent for people with credit card debt concerns.

According to Citizens Advice, credit card firms are simply not doing enough to protect their customers from falling into long-term debt cycles and serious financial problems.

Specifically, the charity wants to see credit card lenders carrying out much more rigorous affordability checks before they offer additional credit to their customers.

“It’s clear that irresponsible behaviour by some lenders is making people’s debt situation worse – such as offering morecredit when they already have thousands of pounds of unpaid debt,” said Citizens Advice’s chief executive Gillian Guy.

“Lenders must act responsibly and direct people struggling with debt towards free and independent advice and support – rather than more credit.”

If you live anywhere in Scotland and you’re in need of advice on how to overcome your problems with credit card debt then Scotland Debt Solutions can help. Contact us directly to arrange a FREE and confidential consultation.

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