Lenders set to cut credit limits

Many of the UK’s largest lenders are preparing to lower credit limits for many of the customers, according to reports.

The amounts of credit card debt consumers are allowed to accumulate will be cut in months to come, even for those who have consistently met repayment demands, reports the Financial Times.

It is thought that lenders around the country are aiming to avoid so-called bad debt by keeping a closer eye on the credit limits of existing customers and by implementing harsher criteria for would-be borrowers.

James Jones, consumer education manager at credit check agency Experian, is quoted as saying: “Most lenders are scrutinising customers’ credit reports ever more closely and on a more frequent basis.”

“We have seen people’s credit limits being reduced when their reports have been squeaky clean,” he added.

Millions of credit card users around the UK have seen their debt management problems worsen in recent months in the wake of five rising in the cost of borrowing since August of last year.