VICTORIA BISCHOFF: End this cult of greed that brought the banking system to its knees

The only reason to give someone an extra £ 8,000 or so unpaid credit is to encourage them to spend more money

Ten years ago, this week, greed and risky loans put the British banking system on its knees.

As Alistair Darling, then Chancellor, was reminiscent of the collapse of investment bank giant Lehman Brothers and the desperate moment that Royal Bank of Scotland knew it would be without money within a few hours, it all feels strangely surreal.

But today we show how banks routinely double the credit limits – or tripple and even quadruple – without asking, and it is as if we have gone back a decade.

The only reason to give someone an extra £ 8,000 or so unpaid credit is to encourage them to spend more money.

The only reason to give someone an extra £ 8,000 or so unpaid credit is to encourage them to spend more money

The only reason to give someone an extra £ 8,000 or so unpaid credit is to encourage them to spend more money

Credit card providers hate when people empty their balance completely every month.

If they can tempt you to spend just a little more than you can afford to pay back that month, so that you have to pay interest, the better for them.

It is a balancing act between the fact that you want to be a little bit overburdened, but not so much that you are completely in default.

It is tempting to think: & # 39; And then? Just because someone gets access to so much credit does not mean that they have to spend it. That is their choice. & # 39;

But people do not just fall into debt because they are careless with their money. It is often because something important changes in their lives, such as losing a job, becoming ill, breaking a relationship or the death of a partner.

If they have a large credit limit available, they will of course use it.

So it seems that banks are once again engaging desperate people. These borrowers need financial help, not a larger credit card limit with an expensive interest rate.

The good news is that new rules this month mean that banks can no longer raise their credit limit if they have a persistent debt. And all new customers must be asked if they want to sign up for automatic credit limit increases.

But the rules are confusing and do not go far enough, especially for existing customers.

Would it not be easier to prevent banks from automatically increasing the credit limits of people? If someone wants or needs his or her credit limit, they will ask for it.

A bank manager recently told me that many people do not want to have the hassle of calling. Well, maybe the rich 1 percent of the country is too busy, but they are not the ones who have to worry.

I'm sure the rest of us could save five minutes.

Bad company

If there is one company with which I would never do business again, then it is Viagogo.

The company behaves like a pantomime bad guy who must be booed when he stinks on stage.

As we show here, tickets do not arrive routinely, do not exist or have been sold to someone else.

It means that loyal sports fans are abandoned and that children who have been waiting for months for their favorite pop idols, look like tears.

Every company with such a nonchalant disregard for its customers deserves to be boycotted.

Are there companies where you would never touch a bollard post?

Tell me at moneymail @ daily, or Northcliffe House, 2 Derry Street, London, W8 5TT.

A cunning trick

Last week our letter editor, Tony Hazell, complained how writing to a bank or utility provider can no longer guarantee an answer. & # 39; It is more likely that it is ignored or lost & # 39 ;, he wrote.

The only way to ensure that the company gets it is to always opt for & # 39; signed for & # 39; shipping, so you have proof that it has been received.

Yet Brian from Kent has another clever way to check that his letters have arrived safely.

He says: & # 39; A few years ago someone gave me this tip: when writing to large companies, you add a check with your letter worth £ 1.

& # 39; When it is opened on the other side, the check is automatically sent to the accounting department for processing.

& # 39; You will then find on your next bank statement that it has been redeemed, with which it is shown that your letter has been delivered. Simples. & # 39;

If you try out Brian's idea, let me know how you do it!