Credit Card Companies Keep Increasing Limits Without Asking!
Warning and worry that Customers are being tempted to borrow more by Credit Card Hikes!
Credit Cardholders are being targeted for credit limits when they are already in difficulties paying of their balances in alot of cases according to “Thisismoney.co.uk.”
Customers are getting their credit limits raised without requesting it or having a choice if they want it raised. This is a terrible strategy by the decision makers right on top of Christmas as the commercial pressure to buy presents is bad enough without enticing people to fall into more debt to start the New Year off.
Consumer bodies have reported that in the last twelve months credit limits of more than 8 million Britons have had an increase of approx £1500 on average as reported to the Citizens Advice Bureau. (CAB)
The C.A.B. went on to announce that only 23% of customers had actually requested a credit limit rise. Surely this is not the credit companies way of operating responsible lending? Have lessons not been learnt from past Credit Crunches?
Gillian Guy, chief executive of Citizens Advice, said:
“Rather than credit card holders seeking to take on more debts, lenders are actively pushing it on people without enough consideration as to who can afford to pay and who can’t.”
Uk Finance authorities were quick to reply with a statement which I hope will be acted upon swiftly;
Richard Koch, head of cards at UK Finance, said: “Credit card providers are completely committed to responsible lending and the industry has come together to voluntarily agree new protocols to ask customers whether they would prefer to opt out or opt in for any credit limit increase offers”
The UK’s main financial watchdog; The Financial Conduct Authority says that it agrees with the credit card providers that they will start obtaining new customers agreed consent with regards to the raising of an individuals credit limit, tat way they have the option to receive the offers or not. This will be offered to existing customers as well.
Citizens Advice however views that unrequested limit raises should be banned altogether to combat the risk of rising debt.
It has been interesting reading peoples reactions and how they differ, A lot of the comments in various forums suggest two different types of people. Those with some financial education and no sympathy towards people in debt and those that do have sympathy and do have financial education to. I’ve categorized them in this way as My source is a money website hence the members have a vested interest.
The views of some is that you do not have to spend the money that is offered to you and that you are not forced to spend it. One gentleman goes on to say that people should not spend it if they cannot afford it.
In essence this is true however the purpose of a credit card is to spread the cost and payback with interest. People who understand how they work use them responsibly but the majority of people do not know how to manage money and are not financially educated and this is where theproblem lies.
As a society Schools do not have financial education in there curriculum how ever if they did I wonder how many people around the world not just in the UK would manage their money better?
The point of the article I read is not about if they can afford it and I find some of the comments on these forums abit callous as the message is WHY are the credit companies putting the temptation there in the first place?
At the end of the day it’s a business and we are just numbers to them so it is up to the individual to educate themselves to protect yourselves!!
There are plenty of ways to teach yourself financial education, I have read many books and the ones that have really helped me understand are the ones written by people who have already walked down the road i want to follow.
I have found much inspiration in Robert Kiyosaki and is Rich Dad Poor Dad books. The explanation and simple diagrams for me were so easy to understand and put into practice.
The other Author I have really listened to and learnt from is self made property investor Rob Moore.
Rob is a larger than life character with great passion about what he does and how he can help others. The words in his books jump out at you and I can full recommend them especially if your into property investing however it[s his latest book that really hits the spot.
Here you have a man who started with nothing and has gone on to work with the likes of Sir Alan Sugar and own 7 Businesses. In his latest book Rob talks about money, His straight to the point approach when reading this book makes you feel as if he is in the room with you. the book is called Money Know More, Make More, Give More by Rob Moore
I would say Rob Moore’s book relates to the UK audience more as hes a guy from a working class background who walks the same streets and drives the same roads as us.
Please let me hear your views and if you have had any bad experiences with debt, If I can help in any way I will as I’ve got the T shirt when it comes to this topic!!!