To get really bloody irritated by automatic credit increases?

[PussyPatronus]

This morning I received a letter from my credit card company. It essentially said:

"Dear Mrs Patronus

As a favour to make your life easier, we're going to automatically increase your credit limit from X amount which you have never been anywhere near spending and couldn't actually afford to spend anyway to X amount which would wipe out your entire long term savings pot, even without the inevitable interest you would accrue.

Thanks awfully

CC company"

Now, luckily for me I am one of those pedantic people with a budget spreadsheet good with money type people who spends only what they can afford and pays off their bill every month. However, you don't have to look very far for evidence that not everyone is like me.

Isn't this just really irresponsible commercial practice? This company already make money by charging the businesses I use my card with and through discount deals with commercial partners etc. Now they want to profit more by encouraging me to get into debt?

Do they do it for everyone?

Or just those that manage their credit well like you. If you had failed to pay every month i doubt they wiuld increase your limit

I doubt they'd do it for someone who owed them money, but then what is the point when they know I spend roughly 10% of my limit?

Just phone them and opt out of automatic credit increases

I think they only do it when they're not making enough money off customers, namely people like you and me who don't spend on credit regularly.

What bothers me is if cards with high limits get stolen then the fraud potential is high.

That's a good point Maisy. I wasn't going to bother calling them because I always end up on hold for ages, but I will now you've pointed out the fraud aspect.

Yes, making more money off me was the heart of my gripe. They'd only be able to do that if I went into the red.

You are not alone. I also think it is extraordinarily irresponsible. If I am financially aware I will ask for an increase (temporary) if I need one. If I am not financially aware and am perhaps struggling with my existing levels of debt then it is perhaps better not to automatically increase the limit.

I made a very serious complaint to Tesco's bank about this 2-3 years ago. Effectively these automatic credit increases are changing the Asset Liability Risk on the Balance Sheet as the Treasury Function may not be aware of the changed risk profile. (As no underwriting is done as part of the automatic credit increase). I was told to go away, given £50 to my account without my permission to shut up, told that Customer Services couldnt deal with my complaint etc.

I wryly smiled to myself when less than 2 months later Tescos were in enormous financial problems, all around controls and lack of. This was a clear example of that poor financial mismanagement.

But what to do about it on a larger scale I have no idea.

Agreed. Get on the phone and give them hell. It annoys me when Virgin Media doubles my bandwidth without asking me if I want it increased, and using it as an excuse to put prices up.

childmaintenance, a bank actually paid you to go away? That must have been quite some stink you created. Or someone had a guilty conscience!

Right, I have all the backing I need to make a bit of a snotty phone call. I might not even wait until my even angrier (teething) DD has gone to sleep to do so!

This happened to me recently. I moved from a fairly shitty area to a quite-nice area, and within days of updating my address TWO credit card companies contacted me to say they were considerably upping my limit.

Like you, I'd never even come close to my previous limit and one of the cards hadn't been used for over a year.

Can't say it really bothered me but I did wonder about the ethics of it all.

You used to have a period from them informing you, in which you could refuse them.

Applying for additional credit still shows up on your credit score and if you've got a low level of borrowing, that keeps your credit score low, so if you are aiming to improve your score (and you are not judged for Social Housing based on CS) this is useful.

That should have been "you are judged on Credit Score for Social Housing"

I know it's good for my credit score. I also know because I keep it on my spreadsheet what my score is on a monthly basis and am not concerned with improving it.

I guess I'm being paternalistic (If I'm trying to be more outwardly feminist, do I say maternalistic, think of another term or try to display irony/indignation in my own use of the term? A discussion for another time... ).

I was surprised they gave me an initial limit of 500. This was upped to 1000 automatically 9 months later. I use it every month, most ever on it was just over 400 but i pay off each month before any interest is added. Youre right in that you should have to apply for a limit increase, to the less anxious about money its like being given free money and many xould afford to pay just tbe minimum and run up tbousands in debt.

It's not irresponsible. Credit card companies have to strike the balance between offering you a good deal and keeping you as a customer, and being financially responsible. They haev obviously looked at the OP, seen that she is paying off her bills, and is a good risk. So they up her limit. If she was not paying her bills or struggling to make minimum payment, they wouldn't increase it. We have three or four credit card accounts as DH is good at switching to the 0% ones and paying off over time and probably have around £40,000 of credit limits as we a a good risk.

Does my head in that some people (not talking about the OP here) blame financial recklessness on everyone else but themselves. Oh it's the banks' fault, they gave me the credit. Maybe, but you were the one who chose to spend to your limit. Take some responsibility, people.

I take your point Poppy and wholeheartedly agree that someone cannot blame the bank for their own financial problems. However, as a PP has more eloquently (than me) explained, it can put whole banks (and therefore sensible customers and tax payers) at risk.

They don't need to do this to keep me as a customer. I put all of my monthly expenditure on this card (I only have it because I get rewarded for spending on it) and it comes to less than 10% of the current lower limit. I didn't want the ridiculous limit I was given in the first place, let alone a higher one.

You literally just phone the bank and opt out of automatic increases. It's not difficult or a massive issue.

Bunty, I know this. I have even indicated this much earlier in the thread. You are missing my point. It might not be a point you agree with (and I didn't think everyone would or else I wouldn't have asked the question), but you are missing it.

I have a ridiculous amount of credit available to me if I want it, but have changed my spending over the past few years so now it's way beyond my usage - i.e. I have a clear record of reduced spending on all my cards.

One card has a limit I have never reached. I recently put a large number of one-off work expenses on it, which took me to about 40% of the limit on that card.

Next month, lo and behold they are wanting to up the limit even more. No thanks.

I had the same thing in a letter this morning. Another increase. It's damn irresponsible. When I took out my cc I was working full time, earning good money. I have always spent around £600-900 a month on my card (all household spending goes on it, then I get lots of lovely loyalty points for Xmas) and it's paid in full every month. The card has never cost me a penny. Limit started at around £1500 and has steadily increased over the years to £8000. I've never spent more than about £1500 on it tops, and that was only when I put a flight on there.

I'm not sure why they keep increasing it! Especially as I've been a SAHM for nearly two years now and don't actually earn anything at all myself. Obviously I have the means to pay the bill each month but it's not the point. They haven't asked if my circumstances have changed before increasing it. I'm responsible with money, but a lot of people aren't.

Thanks to whoever mentioned the fraud aspect I hadn't thought of that. I'm going to email them and ask them to decrease the limit.

That's another thing Shots. Absolutely no consideration of potential changes in circumstance, as reduced spending might indicate. Of course, it might alternatively mean a lovely stash of savings somewhere, but who are they to know?

We actually had an issue from this (not in the UK). DH is (or was, he's got better) rubbish with money. He thought a credit card was set to pay off at 100% a month. In fact it was paying off at 10% a month. For about four years. They just kept upping the limit so by the time it actually got to the bank saying 'no more' and payments being rejected we (he!) owed about four times the original limit on the card!

Yes his fault for being a complete financial numpty but if they hadn't upped the limit the issue would have become evident a lot earlier. We paid it off (but it wasn't fun) but the bank made a lot in interest out of that!

X post with sleepthief.

Yes, I'm grateful to Maisie and glad I posted purely for that fraud insight!

They get it right sometimes though.
Thinking back, my very first card was a student Barclaycard, which they granted me a princely £500 limit on.

My then utter wanker of a boyfriend (non student) had just jacked in his excellent job to live his dream and was basically sponging of everyone he knew, including me his penniless so-called beloved. He managed to convince me to buy some big thing or other by putting it on my card and he'd "pay me back".

Thank god Barclaycard refused to increase my limit!

Ouch Zimmer!

Don't see the problem. I have a psychological limit with my credit card, where I feel uncomfortable if I go above it (its quite low - like 1k). They can increase the actual limit as much as they want (and indeed have done so many times) , and it doesn't matter as the psychological limit is the one I adhere to.