Monday, Sep 24, 2007
It's crunch time, folks
The Times Online: Banks cut card limits and reject borrowers in consumer credit crackdown
High street banks are slashing credit card limits and turning away droves of borrowers in a consumer credit crackdown. Banks hope that by tightening up lending standards they will cut the cost of servicing problem borrowers. Half a million Barclaycard customers have seen their credit limits reduced in a continuing review by Barclays of its customers’ spending behaviour.
Here we go, here we go here we go...
Posted by onyerhike @ 12:00 PM (628 views) Add Comment
10 Comments
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1. dbnazz1 said...
Well, it really has all started now.
In the words of Frank Sinatra, "And now, the end is near, i state my case, to which i am certain....."
2. dohousescrashinthewoods said...
Wow. I had imagined this, but now it's real.
Wow.
3. speculatorone said...
Then certain lenders are launching 125% mortgages and 6x your salary?
It's got me totally baffled at the moment, one day it's doom the next we are ready for rate cuts?
4. Cheekie Charlie said...
This squeeze has been happening at the Halifax since the start of the year slowly reigning in peoples credti card limits and penalizing them heavily if they go over.
5. Tommo said...
Yeah I reckon that's all rubish - 125 6x - that'll be gone soon enough, ain't no-one gonna buy that paper.
All this talk on sub prime is a diversion, personal debt is 5 times that of the US.
6. Dizzy said...
Its definately happening, my bank has just halved my overdraft limit [without informing me!!] I presume they are doing this across the board with all customers.
7. mrmickey said...
I don't know about that, Carol Voderman is still offering subprime loans if you get desperate.
8. alan said...
Tommo,
The BBC website has predictions of up to 500,000 foreclosures on sub-prime mortgages next year. These were securitised and sold as "investments" to instuitutions (yes, I know the rating agencies were too sloppy to check them).
Hardly a diversion !
9. talking rot said...
Chaps
Some restraint please. I recall, only a few weeks ago, that these pages were full of talk about interest rates hitting 6%. That doesn't look very likely now.
This is not the start of anything more then Banks tightening lending criteria. The impact of tightened lending criteria could be easily offset by a reduction in the BoE's base rate of interest. I used to believe we'd hit 5.75%, with a maximum of 6%, interest rates with cuts in the new year. No I am not so sure. We can expect a cut in February and possibly one before. The main issue is whether it will be a 0.25% cut or a full 0.5% cut. If the latter, then the offset has occurred.
Do you really think Gordon Broone will allow the debt-ridden, house-price-based economy to sink so easily? I think not.
He will interfer and, for a time, be successful. Eventually market forces will prevail but that time is not now.
10. denzil said...
David, I think the banks are getting tetchy.