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"MP expressed concerns over credit card withdrawals"

By admin | June 14th, 2008 | Credit Cards, General

Following the controversial decision by Internet lending giant Egg to withdraw the credit cards of over 160,000 customers an MP has expressed concern than banks are simply taking credit cards from those that do not earn them enough money in profits and handing them out to those that have to pay a high amount of interest, thus increasing profits. Egg claimed that the cards were being withdrawn from customers whose credit profiles had deteriorated since they took out the cards, but many of those affected have said that they have perfect credit.

The chairman of the Treasury Select Committee, John McFall, said that many banks would be trying to find a way to increase profits in this current turbulent financial climate, and one way of doing this was to withdraw the credit card facilities of good payers that do not bump up profits through paying charges and interest and instead doling out cards to those that do end up paying high credit card charges and high levels of interest. However, this is a claim that is being denied by the banking industry.

An official from APACS stated: “A credit card company is a business and it will always be looking to do one of two things: either making sure that it’s lending money responsibly to people who can afford to repay any money that they’re borrowing, and secondly, as a business that needs to make a profit, deciding whether it wants to give you and I a card.”
However, Mr McFall stated: “Are we witnessing a situation where credit card companies are taking cards away from perfectly safe customers who pay their bill in full every month on the same date for years – and giving it to customers who are riskier? And if they are doing so, then their methods have to be called into question.”

Recent additions:

• Zero card will benefit some people but not all
• Decrease in capped balance transfer cards
• Getting a good deal on a 0% balance transfer card can still be difficult
• Egg continues to cause upset

Tags: credit card, interest

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