Changes to credit cards

Just a few lines that pop up in pieces about the mooted changes to credit cards terms.

A large chunk of the British population has proved itself to be untrustworthy when it comes to credit, and credit card companies have encouraged us to borrow more than we can afford. If we can\’t be disciplined about the way we use credit cards then it is necessary for the government to do it for us.

Ooooh, yes, children who need Nanny.

\”Sure, there was much over-borrowing but there was over-lending too. Why should the borrowers be penalised?\”

What?

The proposal to ban card issuers from increasing a borrower\’s credit limit without their consent follows recent research from uSwitch showing that over the past year this has happened to an estimated 5.7 million consumers.

The government said it was concerned that consumers did not have enough control over how much they could borrow, and wanted them to decide for themselves \”the amount of credit they can responsibly access\”.

I quite literally do not know what to say here. But, but, but….they\’re going to make it illegal to ask \”would you like to borrow some more money?\”

What?

10 comments on “Changes to credit cards

  1. This is crazy:

    ‘The government said it was concerned that consumers did not have enough control over how much they could borrow, and wanted them to decide for themselves “the amount of credit they can responsibly access”’

    Until CC lenders are buying goods and services without the permission of their customers how do consumers not have enough control over how much they could borrow?

    My bank could extend to me a line of credit of a billion dollars tomorrow. I still have complete control over how much I can borrow because they still can’t force me to pull open my wallet and buy that $100m yacht.

    And you know what? Even if they could, I still have complete control. All I need to do is close my account and go to an institution that doesn’t employ that practice. How many financial institutions are there in Britain that offer credit cards? How many different credit card products do these various institutions offer? It’s not as if the consumer is lacking choice in the matter.

    But that’s the problem isn’t it. People making decisions for themselves. We can’t have that.

  2. For once, I disagree with you: years ago one of my staff had overspent his limit (only£1200 in those days). The reaction of the CC company was to write and tell him that, as his limit was, obviously not high enough for him, they were increasing it to £1800. He couldn’t really afford the payments on the £1200 and, to his credit managed to pay it off instead of going into the totally unmanageable debt into which the company tried to inveigle him.

    Anyway, there’s nothing to stop anyone taking the initiative and asking for a higher limit, is there?

  3. I think the issue is the card companies unilaterally increasing credit limits without ever consulting the cardholders.

    The limit on just one of my cards doubled from £2k to £4k within 2 years of me taking it out, with no input from me; yet the same company refused to even give a card to my father who, from any rational perspective, was and still is in a far more secure financial position than I am.

    The only conclusion one can draw from that episode is that the card companies are eager to offer more credit to ‘riskier’ people because they make higher profits from such people perennially servicing the minimum payment, rather than from those in society who sensibly borrow and then pay back the entire sum plus interest within a short period.

    The card companies just seem to want to extend the credit limits of people who they hope cannot really pay the money back, and forgoing any discussion regarding “no one makes you borrow it”, increasing credit limits without the cardholder asking them to do so is in effect a form of temptation-induced entrapment.

  4. “they’re going to make it illegal to ask “would you like to borrow some more money?””

    As far as I’m aware, the ban will be on not asking that question.

    In my case it’s academic: I overspent on a card, transaction got bounced, and then called to raise the limit (it was a bit low based on the run-rate of transactions). Rather than the usual “no problem” I got a twat reading a script who treated me as if I was a day-time TV finance ad watcher who was going to spend up to the limit in JJB ‘sports’ and then said they’d call me back the next day with a ‘decision’ (which was to graciously grant me half the increase I asked for).

    My credit rating is top notch, so I conclude we are now entering the situation where we are going to be treated as scum by patronising fuckers (see my comment some days ago on getting a mortgage at the end of the last housing crash). In which case, these bans are entirely superfluous.

  5. Is there any way to stop the Government from increasing its own credit limit without asking permission from taxpayers?

  6. I generally support any regulation that tells the companies to consult / communicate with the customer over changes. I also think that they should have to get confirmation to renew a card.

    Where I live they make it very difficult too cancel cards and before you know it a renewal in through the post box without so much as a by your leave.

  7. As an example of how strange some of the credit card company policies are my First Direct Visa credit card, which I never used, had its credit limit increased by about £1,000 each month until it reached £30,000 and stayed there for about three years. They then wrote to me last December saying they were withdrawing the facility as the credit environment had changed and I was too risky. It was all very strange.

  8. At one point in my career as a professional serial postgraduate student, when in the process of compiling the evidence of means to support myself for the onerous Canadian immigration officials, I noticed that available credit was as good to them as cash in the bank. So I pulled out my last statement from each of the major card providers, and noted that my combined credit available was several times the Canadians required minimum for subsistence, and in fact several times my entire career earnings to date at the time.
    Had the card issuers contacted me for permission each time an increase happened, I might have declined, but I am glad that they didn’t, because not using all that money turned out to be quite convenient — saved me lots of time and postage requesting letters from bank branch managers and such.

  9. Anyway, there’s nothing to stop anyone taking the initiative and asking for a higher limit, is there?

    No, but amongst all the talk about easy credit I find it pretty damned difficult to get a new credit card or even get my limit increased. Even before I mention I work in Russia, I’m normally knocked back even though I can demonstrate an monthly income of twice what my current credit limit is. I’m still on the graduate Visa Barclaycard they gave me as a student in 1996, even though I left uni 9 years ago. Not once have they offered to change me to an non-student card.

    I think it’s something to do with the fact that I have spent tens of thousands on my credit card but not used the credit facility (beyond the month you get free) for almost ten years. I’m one of these people who buys everything on a credit card and pays it off every month by direct debit. Those poor sods have made almost nothing off me in a decade.

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