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National Credit Act, 2005 (Act No. 34 of 2005)

Chapter 5 : Consumer Credit Agreements

Part E : Alteration of credit agreement

119. Increases in credit limit under credit facility


(1) A credit provider may increase the credit limit under a credit facility only—
(a) temporarily, as contemplated in subsection (2);
(b) by agreement with the consumer, subject to subsection (3)—
(i) in response to a written or oral request initiated by the consumer at any time; or
(ii) with the written consent of the consumer in response to a written proposal by the credit provider, which may be delivered to the consumer at any time; or
(c) unilaterally, in accordance with, and subject to the limitations set out in, subsection (4).


(2) An increase in the credit limit under a credit facility is temporary if—
(a) the credit provider honours an instrument issued by the consumer, despite the fact that it results in a debt that exceeds the established credit limit; or
(b) the credit provider agrees to raise the credit limit in response to a request from the consumer in order to accommodate a particular transaction, on condition that the preceding credit limit will again apply within a specified period, or after a specified occurrence has taken place.


(3) Before increasing a credit limit in terms of subsection (1)(b), the credit provider must complete a fresh assessment of the consumer's ability to meet the obligations that could arise under that credit facility, as required by section 81.


(4) If the consumer, at the time of applying for the credit facility or at any later time, in writing has specifically requested the option of having the credit limit automatically increased from time to time, a credit provider may unilaterally increase the credit limit under that credit facility—
(a) once during each year, as measured from the later of—
(i) the date that the credit facility was established; or
(ii) the date on which the credit limit was most recently altered in accordance with subsection (1)(b); and
(b) by an amount not exceeding the lesser of—
(i) the average monthly purchases or cash advances charged to the credit facility by the consumer; or
(ii) the average monthly payments made by the consumer,

during the 12 months immediately preceding the date on which the credit limit is increased.


(5) For the purposes of subsection (4), a specific request—
(a) does not include—
(i) an oral request or assent by the consumer; or
(ii) a standard provision of an agreement, the whole of which is accepted by the consumer; but
(b) does include—
(i) a written request in any form authored and signed by the consumer and delivered to the credit provider at any time; or
(ii) a standard form option—
(aa) authored by the credit provider and presented for consideration by the consumer alongside the alternative of having credit limits increased only as contemplated in subsection (1)(b); and
(bb) assented to by being initialled or signed by the consumer.


(6) If, when increasing the credit limit under a credit facility, the credit provider alters any other term of the credit agreement, the credit provider must comply with the requirements set out in sections 93 and 117.


(7) An increase in a credit limit in terms of subsection (4) is not unlawful in terms of section 74(2).