Good idea to allow customers to raise credit card limits at ATMs?
After the recession, we all agreed, I thought, to take it a little easier with our borrowing.
Weren’t we all in this together? Hey, banks, we’re talking to you here!
Indeed, even as the downturn’s effects still linger, many of Canada’s major banks are now offering a sneaky option to get you borrowing more at your local ATM.
At Bank of Montreal bank machines, the Star reports, customers are now prompted with the option to jack their credit card limits right there at the ATM.
CIBC and TD Canada Trust bank machines reportedly offer similar new features, too. RBC will offer it soon, the Star notes, while Scotiabank says such programs aren’t currently part of the bank’s strategy.
“It’s the bank’s job to sell money, so it is easy to understand why this is happening more,” Tom Hamza, head of the Investor Education Fund, told the newspaper.
“In the past, getting a loan or credit wasn’t simple and we needed to convince financial institutions to believe that we could pay it back. Now they are searching for people to give money to and they are very effective at it.”
In fairness, many ATM credit limit offers, which were rolled out earlier in the U.S., are only extended to pre-selected customers, suggesting Bob Doesntpayhisbills won’t be prompted to raise his borrowing capacity if he has little chance of paying back what he already owes.
But there’s a larger question about financial literacy here. The banks maintain customers are becoming more comfortable with ATMs, though does that mean certain borrowing options should be so readily available? You could make a case – quite easily, I think – that the hurdle of actually having to call a credit card company to ask for a higher loan capacity is something good for consumers.
And then there is the issue of when it stops. CIBC bank machines may also ask customers if they’d like more information about an investment product. If they select yes, a bank rep calls them to discuss, but how long does that last? How long might it be ‘til we can buy, sell and trade right at the same terminal that spits out the twenties we use for late-night poutine?
Do you think customers should be allowed to raise their credit card limit at an ATM? Is such enhanced bank machine activity a modern convenience or the opening of Pandora’s Box?
By Jason Buckland, MSN Money