‘Credit Cards’ News
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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Credit Action: Adverts for loans and credit cards breach rules
Posted 2008-05-11
Some credit providers are breaching advertising standards rules with their promotions on social networking sites such as Facebook.According to debt charity Credit Action, some of the promotions being advertised do not comply with the Office of Fair Tradings rules.The concern centres on issues such as the fact that most of the offers of finance, secured against a consumers car or salary, do not include the annual percentage rate of the interest that would be charged or the name of the firm making the offer.Industry rules require companies to reveal the rate if they claim their product is better value than that of a competitor or if the advertisement offers a payment-free period.Malcolm Hurlston, the chief executive of the charity, told the Guardian that the rules must be enforced to protect customers."These are the day-to-day realities of the credit crunch - creditors thinking up new ways of offering the young and the less well-off the credit they need. We must be sure that such creative products concur with existing rules and regulations," he said.Facebook is a social networking site allowing people to contact friends and share photographs ...
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Fool.co.uk: Ask for lower interest rates
Posted 2008-05-7
Price comparison website Fool.co.uk is encouraging consumers to ask for lower rates of interest charged on credit cards.According to the site, 75 per cent of consumer debt is interest bearing and that the annual percentage rate (APR) charged by most lenders is over three times higher than the Bank of Englands (BoE) base rate of five per cent.In response to these figures, David Kuo, is urging credit card holders to confront their providers over the amount of interest they are being charged."APRs are not set in stone, and are open to negotiations. ...
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Credit card companies only have “so much” to lend
Posted 2008-05-5
A personal finance expert has claimed that banks want to issue credit cards but only have so much money to lend.In response to recent figures, which showed up to 18,000 people a day are refused credit cards, David Kuo, head of personal finance at Fool.co.uk, says that banks are increasingly wary about unsecured lending.He said that lenders have to weigh up who the most suitable candidates to lend to are."I think the problem that we have at the moment is that credit card companies do want to issue credit cards but they only have so much money to lend. ...
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Credit card fraudsters could use details to take out loans
Posted 2008-04-29
A failure to notice credit card fraud early on could allow criminals to use the victims details and take out loans in their name, an industry expert has warned.Helen Lord, fraud and regulatory compliance director at Experian, recommended consumers check their credit report regularly in a bid to detect fraudulent transactions, as the longer it is left undetected, the more damage it will do to the rating.She urged anybody who suspects they might be a victim of ID theft to contact their bank immediately."If the problem is solved quickly there shouldnt be any lasting damage to your credit report. Failure to act straightaway could allow a thief to take out loans or credit cards in your name," she stated.A recent report by Apacs, the UK money transmission service, found that online credit card fraud increased by 25 per cent over the last year, to £532 million, which was 54.3 per cent of total credit fraud....
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One in 14 credit card applications are rejected
Posted 2008-04-23
Up to 18,000 credit card applications are being rejected every day, according to a recent survey.Research by price comparison site MoneyExpert.com has revealed that banks are turning down prospective customers over fears about the amount of personal debt in the UK.Over the last six months, 3.24 million people had their requests turned down and the sites Sean Gardner believes the tables have turned in the credit card world."For years borrowers have had the upper hand in the credit card game but the rules have now changed. People with debts who thought they could keep shuffling their cards to stay ahead are now running into trouble," he said.Mr Gardner also warned would be applicants that they should be reasonably confident of acceptance before applying, as a rejection could lead to a black mark on their credit reports. MoneyExpert.com is an independent financial advisor with over 20 years experience....
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Cash makes a comeback
Posted 2008-04-22
A new survey has found that consumers are increasingly paying for goods with cash as credit card debt rises.Figures from the British Retail Consortium (BRC) show that cash transactions accounted for 60 per cent of purchases in 2007.According to Stephen Robertson, director-general of the BRC, shoppers now feel less comfortable spending money which they dont have and this has seen a resurgence in cash usage."Hard up customers are increasingly reluctant to spend money they havent actually got in their hands. While total retail spending continues to grow, there is a widening gap between the amount spent in cash and the amount spent using cards," he said.The BRC also criticised card companies for the charges shoppers incur when using plastic, which is 34p as compared to two pence for cash purchases.In related news, the London Retail Consortium revealed a two per cent increase in like-for-like sales compared to 2007....
Online credit card fraud increases
Posted 2008-04-22
The amount of online credit card fraud is greater than first believed, new research has shown.According to figures from the banking industry, losses through mail, internet and phone, known as card not present losses reached £290.5 million in 2007, a 37 per cent increase on the previous year.The BBC claims that if failed attempts were also taken into account the number would be closer to £500 million.Paul Simms, chief executive at the fraud screening solutions company, 3rd Man, told Vnunet.com that the problem is likely to get worse."Card not present fraud is a major problem which is not going away and is getting worse as criminals increase their efforts to steal from retailers," he said.The Association of Payment Clearing Services has revealed that the total loss associated with credit card fraud in the UK was £535 million.Last year it was found that number of people using internet-based banking had surpassed those using telephone banking....
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Credit crunch spells end of 0% balance deals
Posted 2008-04-16
Zero per cent balance transfers "are going to be very hard to come by, if not non-existent," according to the National Debtline.A spokesperson for the national telephone helpline has said that the knock-on effects of the credit crunch will also be felt on other aspects of peoples personal finances, with some people choosing to stop paying their mortgage to counterbalance the problem.Beccy Boden-Wilks, a debt adviser and spokesperson for National Debtline, said: "One of the major effects of the credit crunch is that people cant manage their large amount of debt as cheaply as they could before; this is having a knock-on effect, which is why at National Debtline were seeing increases in mortgage arrears."She added: "If people cant afford their non-priority debts anymore sometimes theyll stop paying their mortgage as well. Its definitely having a knock-on effect."According to recent research by Sainsburys Finance, around 716,600 people will try to transfer £1.1 billion a month between credit cards this year....
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UK credit card limits slashed by £3.1bn
Posted 2008-04-6
British consumers have seen their credit card limits slashed by a total of £3.1 billion over the course of just six months, it has emerged.Some 1.8 million credit card customers have had credit limits cuts by an average of £1,600 since last November, new research from MoneyExpert.com has found.Credit card provider Egg aroused intense media criticism after voiding the cards of 161,000 of its high-risk customers earlier this year, but according to the latest study that incident was far from an isolated event.Sean Gardner, chief executive of the financial website, said that credit card companies are becoming increasingly stricter about whom they lend to and how much money customers are allowed to borrow."Overstretched consumers might look to resort to credit in a bid to make ends meet but they should not rely on it as a way of keeping spending," Mr Gardner cautioned. "The warning lights should be shining brightly if you find youre going from card to card without making a dent in the amount you owe."As of February 2008, UK consumers owed an estimated £54.8 billion on their credit cards. ...