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2.5 million accounts hit as banks tighten finances

May 14, 2008 by admin  
Filed under News, News-Credit-Cards

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New research has revealed that over 2.5 million credit card customers were either charged a fee, had their credit limits reduced or their accounts closed as banks tried to recover money lost through debts and penalty fees.

Of the customers affected by the new moves, only 16 per cent missed more than one monthly repayment or went over their credit limit in the past year, the study by uSwitch.com has found.

Simeon Linstead, head of personal finance at the company, said that banks should not close accounts, reduce credit limits or adopt annual or monthly fees without giving their customers a reason for doing so.

“We’re not against credit cards providers curbing consumers’ spending if their debts are genuinely getting out of hand,” commented Mr Linstead.

However, he added that credit card companies that “make changes to customers’ accounts must be completely open about how and why they have selected those customers.”

Controversial bank charges are set to be investigated by the Office of Fair Trading.

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