Those friendly messages from your credit card provider granting you an increase in your spending limit are piling pressure onto borrowers and must be stopped, a debt charity says.

StepChange is calling on the Financial Conduct Authority to ban the practice and make credit limit increases something that people must request. The charity also says that in some instances, limits are being increased after people in financial difficulty ask creditors for help.

It comes in the wake of the financial ombudsman’s warning that complaints about payday lenders are his fastest-growing caseload.

Meanwhile credit unions, which encourage responsible saving and borrowing, are attracting a rising membership in Scotland.

The ombudsman said some desperate borrowers had payday loans from up to 12 firms at the same time, though the 178per cent rise in complaints in the year to March year partly reflected better awareness of consumer rights.

StepChange is estimating that more than 100,000 of its clients had their credit card limit increased without asking for it in 2015 and as a result, over 50,000 saw their debt problems get worse.

Currently, credit card companies can decide to increase someone’s credit limit without asking them as long as they give them at least a 30-day window in which to decline. StepChange wants increases to become ‘opt-in’, rather than opt-out.

Its survey also found 11per cent of credit card users asked for help with financial difficulty and the provider responded by increasing their credit limit.

The charity’s previous research suggested that three million people are already using credit as a safety net to cope with everyday expenses and meet emergency costs.

Mike O’Connor, chief executive of StepChange, said: “Before taking out any form of credit, people need the opportunity to decide whether it is the right option for them and if they can afford it. When their credit limit is increased without asking, these key decisions are taken away from them and they face the risk of taking out credit they cannot afford, which can turn into costly, long term debt.”

Meanwhile Glasgow Credit Union, largest in the UK with 39,000 members, has signed up 4000 new members in the past year, the majority in the 25 to 35 age group.

It has helped drive a rise of at least four per cent in membership of Scotland’s 100 credit unions which serve 375,000 people.

GCU, serving anyone with a ‘G’ postcode, works with over 90 employers, enabling 50,000 employees across Glasgow to save or repay directly from salary.

It says: “We have always attracted members from across a wide range of socio-economic groups due to the fact that we offer attractive products and a friendly, professional service. Our current best personal loan rate is 4.9per cent on amounts from £5,000 to £14,999.”

The Scottish Government is trying to encourage more employers to sign up to payroll deduction schemes with credit unions, and promoting tie-ups with schools to help financial education.

Saving via payroll deduction helps people save more and build a buffer to cover unexpected expenses, while the ability to access credit and repay loans in affordable slices direct from payroll helps employees keep away from high-cost lenders.

In schools, Lanarkshire Credit Union's Savvy Savers project has led the way, helping over 7000 primary and secondary school pupils save over £650,000 to date.

In 2015, savers put £454m into credit unions in Scotland, up almost eight per cent on 2014, while borrowers took out £276m, up five per cent.

Frank McKillop at the Association of British Credit Unions says CUs are highly competitive for loans of up to £3,000, which attract the highest rates at banks if available at all. Savers can receive dividends once a year of up to three per cent of the total amount saved, depending on performance.

Mr McKillop says credit unions now appeal to people in reasonably well-paid employment because they are “good for your financial health, however much you are earning”.

Seven years of depressed interest rates have not been an easy environment for credit unions.

John Magill at ScotWest says: “Closing the savings/loan book gap is challenging because credit unions do not wish to discourage savings nor encourage additional debt. So they need to ensure that they have the products in place which mean that when a member wants to borrow the credit union loan represent the best value.

“On the face of it that is an easy proposition - credit unions offer ‘what is advertised is what you get’ loan rates, only charge interest on the outstanding capital balance, and generally don’t have administration or early settlement fees, so a credit union loan is normally very competitive.

“However, we are competing against multinational financial institutions with very large marketing budgets who often use ‘teaser rates’ to get people interested, working on the basis that once a customer starts the application process they are unlikely to take the time to shop around.”

First Minister Nicola Sturgeon said, after a working group reported earlier this year, that the government “recognises the valuable role played by credit unions in building financial health by providing financial services and products to a wide range of customers”.

CASE STUDY

When Robert Shaw from West Kilbride was looking to buy his BMW 4 Series, he realised he might have a problem , despite not having been in debt. “I didn’t have a credit rating because I didn’t have a credit card. I would be penalised because I didn’t have that history.” So he had a look at what credit unions had to offer.

“I shopped around a wee bit, looked at the interest rates I would pay on finance, and Scotwest was by far the best at the time.”

With banks quoting rates in double figures for a car loan, Shaw decided to join the CU movement. “I signed up and became a member with Scotwest, sent them three months of wage slips and bank statements, and borrowed at 4.5 per cent.”