Credit limits hiked without consent

One in five people had their credit card limit increased without their consent, a survey has shown

One in five people has had their credit card limit increased without their consent during the past year, a survey has shown.

Around 19% of card users have received letters from their credit card provider saying they have increased their spending limit without them asking for it, with the average person seeing their credit limit rise by just over £1,500.

A further 13% of credit card users have themselves requested a higher limit, with 9% being successful and the remaining 4% having their request rejected, according to comparison website uSwitch.com.

But 3% of those questioned have had their credit limit reduced by their lender without them requesting it.

The group warned that having a higher credit limit could tempt people to spend more than they could afford, leading to them incurring higher interest charges as they took longer to pay off the bill. Its research found that only 68% of credit card users cleared their debt in full each month.

Louise Bond, personal finance expert at uSwitch.com, said: "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."

Research Now questioned 1,011 credit card holders during June.