Are credit card companies being to generous with offers and limits?

ClarkeKent

With everyone including businesses and financial institutions chasing any kind of yield die to interest rates.

Are credit card companies being to generous with BT offers and credit limits?

I am late-30s and have never seen so much credit limit and cracking BT offers being made. That may be because of my age and credit record, but I suspect it is across the board.

Are the banks and credit card companies creating a potential problem here and perhaps us who are borrowing to much?

[Deleted User]

No. Limits for those new to credit are much lower than previously.

Round_The_Bend

To be honest, yes they probably are.

I am a previous bankrupt and having reached the six year, post discharge mark in March 2015, have been able to obtain available credit of over £50,000, slightly more than my annual salary.

Whilst I am confident that this is not an issue for me personally, as my circumstances were different from many, at the date of bankruptcy, the lenders are unlikely to be aware of this.

Before anybody begins to troll, I pay off my credit bills in full, every month.

In my case, I am incredibly grateful that bankruptcy allowed me a fresh start and made life worth living again. When I look back, I see that the ten years prior to it were unbelievably stressful and mostly empty. Life since 2009 has become better and better, for all of the right reasons.

Nebulous2

It's a bit mixed for me. Pre-crash everyone seemed to offer me £10k. I opened about 5 cards and they were all the same. I then had a long break without opening any and started again about 2 years ago

Now I'm being offered cards without asking - with limits around 5 to 7.5 k. I'm finding companies offering credit limit increases as well. So my view is that credit is looser than it has been since the crash - but still not back to pre-crash levels.

20aday

I'd also agree credit offers are much more prevalent in the last couple of years than they have been since 2008 but I would also agree they aren't back to the pre-credit crunch days.

Doctor_Duke

I agree. Stoozing and having credit card balances is having more of an impact on my credit file than before.

ClarkeKent

It's the balance transfer lengths that are of concern to me, I mean 40 months, madness.

Alot of people kicking the can including myself, rather than knuckling down and paying it off.

What happens when/if in 2-3 years time, credit totally dries up and the balance you have been kicking/snowballing no-one will then take on....

alderpoint

ClarkeKent wrote: »

It's the balance transfer lengths that are of concern to me, I mean 40 months, madness.

What happens when/if in 2-3 years time, credit totally dries up and the balance you have been kicking/snowballing no-one will then take on....

Many of us learnt years ago that balance transfers should only be used to save money: do the balance transfer to a savings account which is paying higher interest that the card is charging (taking into account any fees). Then when the credit dries up, you have the cash in a savings account to pay it off. Doing balance transfers to accounts with higher interest charges is unrealistic - you just won't pay them off - treat the high interest rate as incentive to get them paid off ASAP.

At one point I had about £80k stoozed doing exactly this, but I haven't seen an offer worth bothering about for many years.

Nebulous2

ClarkeKent wrote: »

It's the balance transfer lengths that are of concern to me, I mean 40 months, madness.

Pre-crash periods were certainly shorter, but fees didn't exist, and offers were fewer, but you could just rinse and repeat in 12 months or so.
In fact if I moved a balance from a credit card in 12 months, like clockwork, I'd get another offer.

PeacefulWaters

A credit card limit is not a target.

The length of a balance transfer offer is not obligatory to utilise for the full term.

Such facilities are only made available to adults.

chattychappy

The system still relies on automated decision making based on rather incomplete data. I know people who would be perfectly good for credit, but can't get it. Meanwhile others have available to them much more that they could ever repay.

Generally incomes don't get checked, family situation is unnoticed, savings are invisible. They seem to rely on NHunter to spot obvious frauds - eg multiple applications with differing income details.

Consequence is - yes, some CCs are "too generous" to some borrowers, whilst being "too mean" with others. I think they take the view it's not cost-effective to do more detailed checking.

A friend of mine borrowed £7K from a major bank - personal loan. Her English isn't great, and 3 months later her circumstances changed. Her story was "unusual" to say the least. I rang the bank on her behalf and got the whole lot written off bar a full and final settlement of £1K. I told them the story, but what was interesting was they took my word for it. Didn't want any evidence. It did get escalated and the manager did keep emphasising that they wouldn't normally do this (I'm sure they don't). I rather assumed they'd want a few months of token payments first. But no, letter came back, we sent the money, further letter - end of story, debt marked as partially satisfied. No "debt charity" involved, nothing. Nobody checked anything. I probably sound a bit like a lawyer on the phone, but just described myself as a friend.