Barclaycard cuts credit limits
Barclaycard: limits cut
Tuesday, 25, Sep 2007 09:57
Barclaycard is cutting credit limits for 500,000 customers.
The credit car company has also rejected over half of applicants for new products over the last 18 months as it tries to cut down on bad debt.
"Barclaycard undertook a review during 2006 of the credit limits of our customers," a spokesperson said.
"This resulted in us reducing the credit limits of some 500,000 customers where we had information which led us to believe that these customers may be experiencing difficulties in repaying their total borrowings."
Other initiatives taken up by the credit card company to limit its exposure to bad debt include giving new customers low credit limits at first, then increasing them when they demonstrate they can manage their debts.
It is estimated the moves reduced bad debts by nine per cent for Barclaycard in the first half of 2007 and the cash needed to cover customers failing to repay debts fell to £443 million. Despite the tightening up of lending practices Barclaycard recorded a 17 per cent fall in profits.