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Half of credit card holders offered a credit limit increase without asking

5th August 2014 Print

Nearly half of credit card holders have been offered a credit limit increase by their provider, in the past year despite not asking for one.
 
According to new research conducted on behalf of debt advice and solutions provider Debt Advisory Centre, 47% of card holders say that in the last year their credit card provider has offered them an unsolicited increase in their credit limit. Of these, two-thirds (67%) accepted the higher limit.
 
Perhaps surprisingly, young people were the most likely to be offered a higher credit limit. Nearly two-thirds (62%) of 18 to 24-year-olds who own a credit card have been offered an increased credit limit in the last 12 months, compared to just over a third of over 55-year-olds (38%).
 
Card providers that offer borrowers increased limits must give customers the opportunity to refuse the increase. However, the evidence suggests that relatively few customers (33%) actually do so.
 
Ian Williams, spokesman for Debt Advisory Centre, says: “It’s worrying to see just how many credit card holders are being offered a higher credit limit without asking for one. Of course, while this is not the lender’s endorsement that the borrower should or could spend more up to their new credit limit, they may feel tempted to do so – and two-thirds of credit card holders have accepted an increase when offered.
 
“The offer of a higher credit limit is something of a catch 22 for borrowers; if you never spend close to your limit you probably don’t need access to more money, while if your borrowing is always close to this limit it may mean you’re struggling to manage your finances – which could be a sign you shouldn’t borrow more.”