No more unlimited shopping with plastic money

A credit survey by the Bank of England reveals that lenders have reduced the mortgage credit availability in the last three months to mid-March.

London (shakespearefinance) April 10, 2009:  Credit card companies have clawed back more than three billion pounds worth of credit by cutting down the maximum spending limit. Four percent of people - around 1.8 million card holders - have witnessed a credit limit cut. The cut amounts to the tune of an average 1,600 pounds or a collective 3.1 billion pounds.

This squeezed condition came amid the fall-out from the credit crunch, which has put an end to cheap and easy credit after a period in which consumers have run up a personal debt mountain of 1.3 trillion pounds approximately.

Commenting on this situation, chief executive of MoneyExpert.com Sean Gardner warned-"Overstretched consumers might look to resort to credit in a bid to make ends meet, but they should not solely rely on it as a way of keeping spending or use it as a tool of borrowing" . Now credit card companies are becoming stricter in who they lend to and the amount of money their customers can borrow.

Young borrowers are most at risk of having their limit reduced, as they are finding hard to make their wishes reality. Around 568,600 people of 18-35 age have of the view their credit card provider has reduced their spending allowance and the situation has now become more critical due to unavailability of unsecured credit.

Financial experts are warning to squeeze down the use of credit cards to make the total debt volume under control.