Irresponsible graduate lending

30 September 2010

A month ago, I was still a student – and I had been one for five years. That is five legitimate years of being in higher education – four years for undergraduate study and one at postgraduate level. 

Over those five years – I spent one abroad teaching in France – I juggled three overdrafts and one credit card, as well as owing my parents and boyfriend money at some point or another. A few weeks before I started my job, I received a letter from one of my banks asking me to pay back my hefty (albeit interest-free) student overdraft, otherwise a £1 a day overdraft fee would be charged. This left me with about six weeks to pay back an overdraft that I’ve worked up over five years, or face steep charges. Irresponsible, non?
After swiftly paying the bank off two weeks ago, I applied for a Nationwide credit card. I hold a current account with Nationwide, so after filling in a few quick details they told me I had been accepted…for a GOLD card with a credit limit of £4,900.
I spluttered in horror. It gave me the option to decrease the limit, but only to £3,000. I was expecting a limit closer to £500, and indeed, that’s what I wanted. For a student in her first job (and who hasn’t even been paid yet), £5,000 seems an absurd amount of money to be offered, considering I've only been working two weeks and have a stack load of student debt to deal with. 
I accepted the £3,000 – purely because I need a credit card to juggle my finances while I sort paying for a flat deposit and waiting for my first pay cheque – but there’s no way I need such access to such a huge sum of money. 
I can handle the large credit limit if I tread carefully. After being a non-earner for five years, I want to start making a dent in my debt and certainly don’t want an unmanageable credit limit getting in the way – despite Nationwide’s efforts.

How irresponsible are Nationwide in offering me this huge credit limit that they realize I can’t afford? Are other banks doing the same thing? Let me know what you think.