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A practice by credit card companies which can reduce your credit limit has been uncovered by a BBC radio show.
The little- known practice was revealed when a listener to BBC Radio Four`s Money Box programme complained about an incident he had at a hotel recently.
When a credit card is swiped while checking into a hotel, no money is taken from the account, but a sum is `earmarked` for when you leave. This sum, part of the credit limit, is unavailable until you leave.
Peter Ellis, however, decided to leave the hotel before accruing any charges. He later tried to purchase an item and found, unknown to him, that he was out of credit.
Mr Ellis said: "You should be asked to sign or authorise an amount, so you`re aware of the amount that is being reserved."
The total credit card debt of people in the UK in July 2007 was £53.5 billion, according to Credit Action figures.
