Credit card firms ‘cull responsible borrowers’

Posted 2008-02-7

Credit card firms are exploiting the industrys current purge of high-risk customers by weeding out some of their most responsible - and so least profitable - customers, it has been claimed.

Last week, Egg wrote to seven per cent of its 161,000 customers advising them that their cards would be withdrawn within 35 days due to an ongoing clampdown on irresponsible lending.

While Egg claims all such cardholders fall into the “higher than acceptable risk” category, critics accuse the lender of also ditching some responsible customers simply because they are not generating enough income.

The Times interviewed one former customer, Gillian Cox from Farnham, Surrey, who was dropped despite never having breached her credit limit, always paying off her balances on time and having no mortgage or debts.

“Its disgusting that they are making out its just the bad ones who are being dropped,” Smith told the newspaper. “Fair enough if thats what they want to do, but dont send a really upsetting letter that makes it sound like we have a bad credit history all of a sudden.”

Egg has defended its move, insisting that the decision to remove customers was based on broader deteriorations in credit profiles rather than isolated incidents such as missed balance payments.

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