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Credit card limits 'reduced by providers'

Limits on credit cards offered by UK providers are being cut, it has been claimed.

Financial website MoneyExpert.com has found that some £3.1 billion of borrowings has been "clawed back" in this manner, with 1.8 million consumers having their limits reduced.

According to the research, around 47 per cent of limits now stand at under £1,000.

While this amounts to a restriction in freedom to borrow, it could also help consumers to pay off credit cards - as the move effectively sets a tighter upper limit on their debt.

The changes come as a direct result of the credit crunch, the financial crisis which has also caused similar shrinkage in the UK home loans market.

Sean Gardner at the money website commented: "Overstretched consumers might look to resort to credit in a bid to make ends meet but they should not rely on it as a way of keeping spending.

"Credit card companies are becoming stricter in who they lend to and the amount of money their customers can borrow."

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