Tuesday 17th of March 2009
Moves by banks to cut credit limits mean consumers need to take greater control over their spending, it has been suggested.
Fool.co.uk has noted that credit card providers are taking steps to reduce the amount of money that can be borrowed.
David Kuo, head of personal finance at the site, added that many people are not aware of the debt that can be built up through interest rates and penalties when they go beyond what they are allowed to borrow.
"Whilst banks and credit card companies are cutting people’s credit limits, that also now means that people have to be disciplined because they don’t have that flexibility anymore," he said.
Those who are struggling to cope with reductions in credit limits may wish to consider an individual voluntary arrangement in order to avoid declaring themselves bankrupt.
Mr Kuo’s comments follow MoneyExpert.com findings that reductions to credit card limits have been experienced by around 2.7 million customers in the last six months, with the average amount being shaved off borrowing levels being £1,960.
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