If like me, you had a vague recollection of something happening about automatic credit limit increases at some point in the recent past when you read the title of this post, you’d be right. But what was it that changed, specifically? Can you remember?

Good. It’s not just my memory that is failing in my mid-20′s old age then!

I had a letter from Barclaycard today sporting the bold headline “Important news about your Barclaycard credit limit”, which immediately filled me with a minor sense of dread, and a great deal of curiosity. Were they moving it down? Why would they do that (other than “because they can”, of course)? Not that a reduced credit limit would annoy me for any particular reason other than a feeling of them casting a minor slight on my character.

My Assumption

I didn’t think they’d be moving it up, because they weren’t allowed to any more, were they?

But it appears I was wrong; both in my assumption that they’d be reducing my credit limit and in they can’t just put up your limit randomly. The next line (in considerably smaller print I might add) quietly whispered “Good news, from 2 September 2011 your credit limit will be increased from £x,xxx to £xx,xxx.

After I had picked my jaw up off the floor, I began a Google hunt with ideas floating through my mind that they couldn’t do this. I remember Martin Lewis over at Money Saving Expert campaigning to ban just this very practice. And I further recalled, or so I thought, that he’d been successful?

So just what were Barclaycard playing at?

The Reality

Having done a lot of digging, the result (taken from a leaflet PDF published by The UK Cards Association) seems to be that I was half right. Credit Card companies can still randomly increase your credit limit if they choose, but they must notify you separately from your usual statement letter, and give you at least 30 days in which to decline the offer. This is still therefore an “opt-out” method rather than “opt-in”, so far from ideal.

Currently they can say “Hey, you… your credit limit is going up. Well done! If you don’t fancy it though, ring our premium rate number”. Who will bother to not accept it? I think I’d prefer them to write to customers and say “Hey, you… you’re eligible for a credit limit increase. If you want it, give us a shout”.

But I suppose in the grand scheme of things, this wouldn’t earn them nearly as much profit and that’s what credit card companies are all about at the end of the day.

Remember, credit card companies are not your friend! But thanks for the increase anyway.

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