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Banks 'to get tougher'

Published: 31 December 2008 in Credit Cards

In the new year, the banking sector is likely to get tougher over what it will let customers have in terms of available credit, one sector commentator has claimed.

David Kuo, head of personal finance at money website Fool.co.uk, said that credit card customers may find that in the early part of 2009 they go over their limits as credit is cut.

"The banks are actually cutting back on people's credit card limits and they are cutting back on people's overdrafts so you will have no option but to actually start paying that off," he added.

Mr Kuo advised that by not doing this consumers could be faced with high penalty fees.

Earlier in December, credit card companies agreed with the government on a new set of fair principles that will put an end to overnight increases in credit card charges and give time and space to borrowers struggling to repay their debts.

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