Half of Scottish credit card holders offered unsolicited credit limit increase

4th August 2014

*50% of credit card customers in Scotland offered higher credit limit by their lenders.

*Two-thirds of these accepted the increased limit.

Half of credit card customers in Scotland have been offered a higher credit limit in the last year - even if they did not ask for one.

According to the latest research* conducted for Scottish debt advice and solutions provider Debt Advisory Centre Scotland, (www.dacscotland.co.uk) 50% of Scottish credit card customers have received an unsolicited offer of increased credit during the last 12 months. Of these, two-thirds (66%) accepted the offer from their lender.

Across the UK as a whole, 47% of respondents with credit cards revealed they have been asked by their lender if they wanted to increase their credit limit. More than two-thirds (67%) agreed to the offer.

People aged 18 to 24 years old with credit cards were the most likely to be offered a higher limit, even if they did not ask for one. Two-thirds (62%) of this age group received such an offer, compared to a third of over 55-year-olds (38%).

Lenders are obliged to ask their customers whether they would like their credit limit to be extended rather than doing it automatically, but borrowers do not have to agree. Neither is the lender's offer an endorsement of the customer borrowing more - it is simply the maximum limit they are willing to lend to their customer at that point and in those circumstances.

However, the research shows that only a third of Scottish credit card customers did not accept a higher credit limit when offered one in the last year (34%).

Ian Williams, spokesman for Debt Advisory Centre Scotland, says: "The practice of lenders offering to increase their customers' credit limits presents something of a catch 22 to borrowers. Those who rarely max out their cards are unlikely to need a higher limit, while those who do and then struggle to repay it may be in a position where it is unwise to borrow more.

"And yet, of the half of Scottish credit card holders who have been offered a higher credit limit, two-thirds have accepted it. However, they should do so with caution as borrowing more can mean the balance takes longer to repay, and that customers end up paying more interest in the long-term."