Actions of credit card companies called into question

Posted 2008-05-12

Over 2.5 million credit card customers have been hit with annual fees or the threat of having their account closed, new statistics have revealed.

Research from uSwitch.com has found that 1.6 million consumers have had their credit limit cut by their provider, while 1.3 million have had their account closed or been told they must pay a set charge each year.

Of those surveyed, a quarter were told the decision was down to their poor credit rating and 27 per cent were not given any reason at all.

More than 50 per cent of those affected were using their card on a regular basis and making the minimum payment, while 20 per cent used it habitually and paid the balance off each month.

Just 16 per cent of respondents exceeded their limits or missed a repayment.

Simeon Linstead, head of personal finance at the price comparison site, said that lenders should explain why customers are on the receiving end of these measures.

"Credit card companies who are taking action to close down or make changes to customers accounts must be completely open about how and why they have selected those customers," he said.

Fool.co.uk recently stated that credit card companies should help customers through difficult times instead of placing more charges on their products.

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