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HSBC cuts credit card limits by up to 40%
by This email address is being protected from spam bots, you need Javascript enabled to view it on Wednesday, 18 March 2009
LENDING RULES: HSBC has slashed credit card limits by up to 40 percent amid the current credit crunch. (Getty Images)
HSBC Middle East has slashed credit card limits by up to 40 percent, tightening lending further as the liquidity crunch deepens in the UAE.
The bank confirmed to Arabian Business on Wednesday it had been revising credit limits for two to three months because of market conditions but it appears that the number and type of customers affected is widening to people with perfect credit records.
“HSBC reviews its customers card usage payment patterns and associated risks as an ongoing practice and in line with market conditions.
"Based on this information credit limits are adjusted upwards and downwards. These changes are the natural course of our credit card business and as a responsible lender these are done to ensure customers enjoy the financial flexibility they desire and are in a position to repay their debts,” Thimal Perera, the HSBC regional head of credit cards said in a statement.
One HSBC customer told Arabian Business he had received a text from the bank informing him his credit limit would be lowered by up to 40 percent.
Banks in the UAE are increasingly worried about customers unable to repay debt as job losses mount in the emirate.
Arabian Business reported in November that HSBC had doubled the minimum salary someone must earn to qualify for a personal loan from AED10,000 to AED20,000.
READERS' COMMENTS
Disclaimer: The views expressed here by our readers are not necessarily shared by ArabianBusiness.com or its employees.
credit limit slasher more than 40%
Posted by PAULA, east liverpool, usa on Monday 30 March 2009 at 22:33 UAE time
They slashed mine from $5000 to $520!!! Never late and always paid on time. This card was for my small plumbing business. They lost my business, what can a small business do with a limit of $520.
Posted by PAULA, east liverpool, usa on Monday 30 March 2009 at 22:33 UAE time
They slashed mine from $5000 to $520!!! Never late and always paid on time. This card was for my small plumbing business. They lost my business, what can a small business do with a limit of $520.
Credit Crud
Posted by Bemused, Dubai, UAE on Monday 30 March 2009 at 11:37 UAE time
I have had one card reduced from 55,000 to 3,000 that is not 40%. but they still left my other one intact at 55,000.
HSBC is losing the plot, I am sick of bad service and even worse "Helpdesk" phone staff..
That's why I am changing banks.. Good Luck HSBC Middle East..
Posted by Bemused, Dubai, UAE on Monday 30 March 2009 at 11:37 UAE time
I have had one card reduced from 55,000 to 3,000 that is not 40%. but they still left my other one intact at 55,000.
HSBC is losing the plot, I am sick of bad service and even worse "Helpdesk" phone staff..
That's why I am changing banks.. Good Luck HSBC Middle East..
Cutting limits protects you from fraud!
Posted by dubaiexpatforumdotcom, Dubai, UAE on Wednesday 25 March 2009 at 10:17 UAE time
Cutting credit limits is a vital defence against fraud and people should not see it as some kind of symbol of the credit crunch affecting the bank, more it is taking positive steps to protect its customers (as well as itself) from fraud.
In the UAE there is no central credit referencing agency and so standard limits are commonplace based upon the Bank's internal assessment rather than the customers needs or assessed usage. There is no Chip&PIN either at Points of Sale and it is very rare that anyone checks a person signature and customers quite often allow their card out of their sight where it could be skimmed and cloned.
The UAE is seen by many to have a high percentage of affluent professionals and criminals are not slow to catch onto the possibility to exploit this. A responsible bank will thus look at its own controls and tighten them if necessary to minimise any potential losses. Reducing credit limits intelligently based on usage limits the amount that could be stolen.
I for one am thankful that my Bank takes its responsibility to protect customers from fraud so highly - probably why it hasn't needed to be bailed out like some many other banks in the world...
Posted by dubaiexpatforumdotcom, Dubai, UAE on Wednesday 25 March 2009 at 10:17 UAE time
Cutting credit limits is a vital defence against fraud and people should not see it as some kind of symbol of the credit crunch affecting the bank, more it is taking positive steps to protect its customers (as well as itself) from fraud.
In the UAE there is no central credit referencing agency and so standard limits are commonplace based upon the Bank's internal assessment rather than the customers needs or assessed usage. There is no Chip&PIN either at Points of Sale and it is very rare that anyone checks a person signature and customers quite often allow their card out of their sight where it could be skimmed and cloned.
The UAE is seen by many to have a high percentage of affluent professionals and criminals are not slow to catch onto the possibility to exploit this. A responsible bank will thus look at its own controls and tighten them if necessary to minimise any potential losses. Reducing credit limits intelligently based on usage limits the amount that could be stolen.
I for one am thankful that my Bank takes its responsibility to protect customers from fraud so highly - probably why it hasn't needed to be bailed out like some many other banks in the world...
lucky?
Posted by Serg, Sharjah, UAE on Tuesday 24 March 2009 at 19:16 UAE time
today I received a mail - HSBC increased my limit from 25000 to 38500. Am I only one lucky? & I never asked them...
Posted by Serg, Sharjah, UAE on Tuesday 24 March 2009 at 19:16 UAE time
today I received a mail - HSBC increased my limit from 25000 to 38500. Am I only one lucky? & I never asked them...
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