Monday, April 7, 2008

Another Credit Squeeze

UK credit card limits cut by £3.1

Brits have seen their credit card limits cut by £3.1 billion in the last six months. Since November, 1.8 million credit card customers have seen their credit limits slashed by an average of £1,600, according to new figures from MoneyExpert.com. In February Egg cancelled the cards of 161,000 customers which it deemed to be a high risk, and many other card companies are now taking similar action – with borrowers in their 20s most likely to see limits cut. "Credit card companies are becoming stricter in who they lend to and the amount of money their customers can borrow," said Sean Gardner of MoneyExpert. “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."

Posted by plato @ 07:56 PM (579 views)
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8 thoughts on “Another Credit Squeeze

  • This looks like they are calling in their debts……. slowly….

    Gently gently catch a monkey as they say. The next tranche of providers? £1400 limit ? Then oops a lot of debtors are over their limit and have to pay 23% APR. Well no such thing as a free lunch as they say…

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  • waiting for the crash says:

    Good – it will means banks are less kean on marketing debt, have a better handled on what debt is and their customers and stop lending to people whi cannot afford to repay their cards and loans and maybe a few people will learn that they don’t need to spend all of their income and more each week and live in debt permanently and consider credit cards as income.

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  • This, surely, is a good thing!!!!!! If the debt isn’t there to get into then the population will be better for it. However expect bleating from retailers who will blame high interest rates for their poor product range and business models. Bail out the banks, but don’t forget the retailers who have also been riding high on the wave of cheap debt, and now need to reasses their approaches.

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  • 1. Orwell said…
    This looks like they are calling in their debts……. slowly….

    I hardly think that telling 160,000 customers to sord off on the same day can be classed as “slowly”. But in Eggs case – being a new-fangled and clever young internet start-up – it is because they often securitised their debt. I imagine that particular rug has been firmly pulled away from them. Must gut them really, they spent a lot of money getting those customers because their marketing was terrible.

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  • Without unsecured debt to keep the bubble going a bit longer the end comes more quickly.

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  • Slightly off-topic, but does anybody know whether the tv channels still advertise debt consolidation companies? I imagine they must be heavily reliant on wholesale funding, so how are the likes of Ocean Finance or Norton Finance coping?

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  • waiting for the crash says:

    drewster

    ocean finance still tart themselves – but thats all I see these days.

    Vodermanns don’t about – can I have some credit please carol.

    How tv companies make money now – don’t know!

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  • waitingfor… I assume they make their money by charging sky-high interest rates? Also the companies which sell IVA solutions are probably still advertising, since they are just intermediaries rather than actual lenders.

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