Credit card warning for application incomes

Borrowers have been urged not to over inflate their incomes when applying for credit cards .

Research by credit reference agency Callcredit Information Group has shown that nine per cent of adults have done this, with the figure rising to 13 per cent for those aged between 35 and 44.

Graham Lund, managing director of Callcredit, is worried about the phenomenon and the impact it will have on people's finances .

He said: Credit limits, which are determined by individual lenders, are assessed on how much an applicant can realistically afford.

If the borrower is inflating their income significantly and then maxes out their high credit limit, they are running a serious risk of getting into financial difficulties and being unable to repay the debt .

Moneysupermarket.com recently said that credit card holders could buy years off their overall term by paying off a little more of their debt every month.

The firm also suggested that paying an extra £20 per month extra on the average credit card bill could reduce the overall interest by more than a third.