Unrequested credit card limit increases are making debt problems worse for thousands of people and must be stopped, according to StepChange Debt Charity.
A survey of its clients reveals that of the 54% who said their credit card limit had been upped without them asking for it, 49% believed it had made their debt problems worse.
Increased credit card limit fuel debt issues
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Unrequested credit card limit increases are making debt problems worse for thousands of people and must be stopped, according to StepChange Debt Charity. A survey of its clients reveals that of the 54% who said their credit card limit had been upped without them asking for it, 49% believed it had made their debt problems worse. Based on the survey results, the charity estimates that more than 100,000 of its clients had their limit increased without asking for it in 2015 and, as a result, more than 50,000 saw their debt problems get worse. Currently, credit card companies can increase someone’s credit limit without asking them – as long as they give them at least a 30-day window in which to decline, according to StepChange. But the charity says this shouldn’t be allowed, and it is calling on regulator the Financial Conduct Authority to stop credit card companies increasing someone’s credit card limit without their consent. It wants credit limit increases to become ‘opt in’, rather than opt out, to help prevent people being offered credit they did not decide they needed and did not decide they could afford. Mike O’Connor, chief executive of StepChange Debt Charity, says: “Before taking out any form of credit, people need the opportunity to decide whether it is the right option for them and if they can afford it. “When their credit limit is increased without asking, these key decisions are taken away from them and they face the risk of taking out credit they cannot afford, which can turn into costly, long term debt.”
Source Moneywise http://ift.tt/1Zis1ji
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