Increased credit limit

chieffy72

Of course,it's great commercial sense but how is it responsible to offer someone who is obviously struggling to repay £1500 another £750?

chattychappy

chieffy72 wrote: »

how is it responsible to offer someone who is obviously struggling to repay £1500 another £750?

Answered in my post above.

chieffy72

chattychappy wrote: »

Answered in my post above.

No it wasn't.

chattychappy

chieffy72 wrote: »

No it wasn't.

You might disagree with my answer, but that does mean I didn't answer your point. You picked up on the commercial point, but didn't respond to the remainder.

david39

The fact that the someone is only paying minimum payments does not mean necessarily that he is struggling. There are several reasons why he could be making small repayments - maybe he, or a partner, has a credit card debt that is at a higher rate and therefore the borrower is quite wisely paying the bulk of their available money against that debt. They can be doing that without necessarily struggling.
Alternatively, maybe the cardholder enjoys an exciting lifestyle and prefers to splash their spare cash out on frequent exotic holidays and is happy to pay their credit card debt in minimum payments to finance that in cash.
The credit card company, in its wisdom(?), can see that in the above cases there is spare cash around and that they can grab even more of it by upping the credit limit so that the cardholder uses their card next time they want to make a big purchase.
I don't think that is irresponsible lending - but it could be described as taking advantage of a commercial opportunity which is what most businesses exist to do. Of course, if they have misread the situation, and the cardholder really is struggling, then he should decline the increase which is what one poster above has sensibly done.

YorkshireBoy

david39 wrote: »

The fact that the someone is only paying minimum payments does not mean necessarily that he is struggling.

Indeed. There's one poster further down the board who is deliberately not settling his bill in full each month, even though he can afford to, in the totally misguided belief that he's actually improving his credit rating!

MoneyWasting_Expert

Does declining a credit limit rise, help with internal scoring in anyway? Such as taking responsibility?

chattychappy

MoneyWasting_Expert wrote: »

Does declining a credit limit rise, help with internal scoring in anyway? Such as taking responsibility?

Somehow I doubt it and I doubt whether they would offer again for some time. You can imagine the threads if they did:

1) Horror - I'm being harrassed by my credit card
2) Is it legal?
3) Is my debt enforceable?

I believe you can now permanently opt out of limit increases.