Billions shaved off spending power on credit

By Jennifer Hill

LONDON (Reuters) - Card providers have clawed back more than three billion pounds-worth of credit by cutting their customers' spending limits, research shows.

Four percent of people -- around 1.8 million card holders -- have had their credit limit cut, to the tune of an average 1,600 pounds or a collective 3.1 billion pounds, according to price comparison Web site MoneyExpert.com.

The findings come 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.

Sean Gardner, chief executive of MoneyExpert.com, warned more pain could be on the way.

"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," he said.

"Credit card companies are becoming stricter in who they lend to and the amount of money their customers can borrow.

"The warning lights should be shining brightly if you find you're going from card to card without making a dent in the amount you owe."

There are still some good 0 percent credit card deals around.