Britons have seen their credit limits slashed by around £3.1 billion ($6.2 billion) as credit card issuers and banks begin to be concerned about consumers’ ability to repay their debts.

Around 4% of people in a survey said that their credit limit has recently been reduced by their card provider as financial services companies impose stricter lending criteria.

Young people are found to be at a greater risk of having their spending limit lowered, with 6% of 25 to 34-year-olds saying their provider had recently cut their limit, according to reasearch by MoneyExpert.com.

Customers typically had their credit limits reduced by £500 ($1000) or less, with 47% of people receiving reductions of up to £1,000 ($2000).

In a high-profile case of credit limit reduction,  internet bank Egg notified over 160,000 customers in February and told them that their credit cards would cease to work in 35 days. Egg claimed that these customers had a “higher than acceptable risk profile”.

The new research suggests Egg is not the only bank reviewing the risk profiles of customers. New data from the Bank of England shows borrowing through credit cards, overdrafts and loans has soared to its highest level in more than five years.

Unsecured debt increased during the month, prompting speculation that consumers have become overstretched, and were relying on credit to meet their daily living costs.

Investors’ love affair with government bonds may be about to head towards a breakup!

Demand for this kind of debt seems to be waning. Warning signs range from South Korea’s national pension fund declaring that it will shy away from U.S. Treasuries to major fixed income players beginning to favor riskier forms of credit again.

Various bond issues by Japan, Germany and the United States have drawn lackluster responses at recent auctions. Announcements from Britain that it needs to issue more debt to address the consequences of the credit crisis are also weighing heavily on investors.

Much of the reason is price, although the dollar’s weakness is also a factor.

Many bonds have become very costly, with yields falling as the credit turmoil and economic worries have driven demand for safe investments.

The credit crunch has been difficult on homeowners in the United States, but most of their neighbors to the north in Canada are confident in their spending habits and with managing their debt, according to a new study.

A report released yesterday, commissioned by Bank of Montreal, suggests that a majority of Canadian homeowners classify themselves as “smart spenders”.

That description comes even though more than 75% of those surveyed carried some type of non-mortgage debt that, on average, tops $28,000.

Many reported feeling comfortable with their debt load, because most use it for value-added investments such as home renovations or retirement savings.

The report showed “smart spending” was commonly defined as spending within a budget and getting the most value for your money.