As someone who is very slowly getting rid of a 5k GBP debt with egg I wish they had done it sooner. Credit cards are far to easy to use if you lack self control.

I don't think this is just impending recession that is forcing UK financial institutions to rethink their approach to lending.

In the next few weeks/months the results of a test case between 8 of the High Street banks and the Office of Fair Trading could potentially cost them billions in having to repay charges made to people for going overdrawn. This may ultimately change the face of banking in the UK.

Although the likes of Barclaycard are different legal entities from partner banks such as Barclays - the balance sheet of the credit card and bank will impact on each others reputations.

I suspect the banks are doing this out of their own self interest rather than any desire to protect consumers from themselves.

I can't say that I blame them. Would you loan money to someone who is not likely to pay you back?

This is why I've said many times that people should have an emergency fund, and not just rely on access to credit as their protection against lost income or unexpected expenses--access to credit can be lost at any time.

As Dwight says, I doubt very much that this is the banks trying to protect customers from their own foolishness. Until recently, the banks have made a lot of money from their most foolish customers. In an economic downturn, though, the foolish customers may well stop paying not only the interest and fees, but also the principle amount owed. The banks are just trying to stop the bleeding from their own bottom lines.

Who ever said or believed Banks were your friend or you were a friend of theirs? They are a business and you are a "business" entering into a business relationship. Why you would get angry about that is unclear to me. If you look at it any other way, who's fault is that? No reason to yell or whine about arrangements you enter into willfully. Too much blame shifting in this world. It is the banks fault if I overspend and can't control my use of credit - - Please. Gosh, you mean they expect to get the money BACK?

I got in over my head once, and it's taken a long time to get back. With a 35 day warning, I can only imagine what I'd have done. Panicked, for a few days, then looked really hard at what I needed to do now. Hopefully, a few people won't be digging farther down once they've hit rock bottom with this kind of process...

I didn't see much mention of whose credit will be cut - repeat non-payment of bills? 3 strikes and then the money is scrounged up for the minimum, and then three more months of non-payment? No idea either if other customers are being given greater spending limits now, too.

When someone has to declare bankruptcy, the banks don't get very much back. Not letting someone who's sinking that far keep sinking just might gain them what they'd loaned, instead of a percentage of very little.

I have had a card cancelled on me because I never used it, and one of my friends had a card cancelled because he always earned a good amount of rewards and always paid it off.  The credit card companies aren't trying to help the consumers, they are just trying to help themselves.  I saw a documentary where they called the people who pay off creditcards "deadbeats" because we don't make money for them.

Without a job due to a tech bust layoff, I went 14 months unable to find work, after having just received a promotion (the company had never laid off anyone previously, and my career path looked rock solid) and buying a house. I had a year's worth of emergency fund, but some unexpected repairs ate it in eight months. I then had to turn to my credit card, which I deliberately kept with a low limit, and finally a high-interest consumer loan to survive the drought. When I got work again, I started paying off and am now free of all debt other than my mortgage. But if I had been denied access to a total of $10,000 in credit because of how suddenly I had needed to access it, I literally would have lost everything and been homeless.

Long story short -- they need to have in place a way of overriding this decision to allow responsible people access to the credit they have earned in times of emergency.

I have to second Looby's point - as someone who never carries a balance, the amount of people contacting the BBC about being cancelled with good credit is a bit unnerving. I hope they just stick to canning people who aren't paying them back properly, not those who use credit responsibly.

...where I would fall in the grand scheme of it? I am not "in debt" but I carry my Xmas bills over maybe 2 or 3 months, I am not a credit card "deadbeat" either. They make a little off me, but not much, since my rates are still good.

It's scary because I too think that credit should be there for tough times; but I do have my emergency savings too.

I disagree with the previous post. I do believe that credit card companies make money of each transaction, but the fees those transactions generate are no where near the fees that are collected from late payment charges and interest collected when consumers pay the minimum payment.

I have a friend who used introductory 0% APR rewards credit cards to for purchases and bills. He would pay the minimum, collect an extra 5% in rewards and then when the 0% period ended, he would pay off the entire balance. Then he'd cancel the card and apply for a new one. He continually did this with multiple cards for many years.

While the card company may have made 3-4% in transactions, they lost out in terms of rewards (most of which were cash rebate checks.) Just recently he has been applying for 0% cards and has gotten rejected. And this is a person who pays everything on time... but he doesn't pay a penny in interest.

Perhaps I'm cynical, but his credit card companies have probably realized that they may be losing money on him and just don't want to extend him any more credit. They may have finally gotten a formula to weed him out.