CONSUMERS have had credit limits slashed by up to £3 billion due to the financial crisis.

Around 1.8m credit-card customers have been hit in the past six months, with the average reduction around £1,600, according to a study by comparison site Moneyexpert.

It is the latest evidence of the clampdown by credit-card firms on customers who they fear may not be able to repay debts.

Sean Gardner of Moneyexpert said: “Overstretched consumers might look to resort to credit in a bid to make ends meet but they should not rely on it as a way of keeping spending.

In February Egg cancelled the cards of 161,000 customers whom it deemed to be a high risk, and many other card companies are now taking similar action.

Young borrowers are most at risk, with some 6% of 25 to 34-year-olds - around 568,600 people – saying their provider has reduced their limit.

Almost half the credit-limit cuts are no more than £1,000 while 15% had their spending limits cut by more than £2,500.

Moneyexpert said around 980,000 people switch credit-card providers each month, suggesting many are using cards to help make ends meet.

Gardner said: “There’s nothing inherently wrong with taking advantage of a 0% credit card for a year as long as spending is controlled.

“The warning lights should be shining brightly, however, if you find you’re going from card to card without making a dent in the amount you owe.”

A good way to improve your credit rating is to make sure your credit file, used by firms to judge risk, is up to date and there are no mistakes on it.

You can check your file by contacting credit reference agencies such as Call Credit, Experian and Equifax. They charge £2 to disclose your file.

If you are looking for a good credit card deal, HSBC’s Mastercard offers 12 months interest-free on purchases, with a standard rate of 15.9%.

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