UK Banks Are Reining Back Their Credit Card Services
October 20 2007
By Stephen Kiely, ccrmagazine.co.uk
In a sign that the recent turbulence in global financial markets has had a knock-on effect at consumer level, banks in the UK are reining back their credit card services.
Limits have been lowered and many potential customers have been turned away in what the Times terms a ‘consumer credit crackdown’. The report also says that half a million Barclaycard customers have seen reductions to their credit limits after their spending behaviour was reviewed.
Although the recent market crisis which stemmed from the collapse of the sub-prime mortgage market in the US, has exacerbated credit problems within banks, evidence from Barclays shows that the card crackdown has deeper roots.
A spokesperson for the bank said: "We have been going through a review since 2006 and lowered credit limits for 500,000 cardholders where customers are over their limits or where they have become overextended."
James Ketchell of the Consumer Credit Counselling Service, which gives advice to worried cardholders, said that it has received between 18% and 20% more calls since the beginning of the year. "The banks are making it a lot tougher to obtain credit," he added.