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"Are credit cards being handed out without proper checks?"

By admin | August 24th, 2008 | Credit Cards

There are concerns amongst industry officials that whilst the global credit crunch has resulted in a cutback in lending and far tighter credit conditions many credit cards are still being handed out to borrowers without the necessary checks being carried out in terms of the income and financial status of the applicant and the applicant’s ability to make repayments on the debt. Credit conditions have become increasingly difficult over the course of this year, with the credit crunch continuing to bite, but last year many people that took out credit cards may not have been checked for eligibility adequately.

A report from the price comparison website uswitch.com claims that many of those that took out credit cards last year were not properly checked, and their figures showed that an alarming 84% of people that succeeded in getting credit cards last year were not asked to provide proof of income such as payslips, which means that effectively the credit card provider had no real idea as to whether the applicant could afford to make repayments after using the credit card.

The issue is causing increasing concern because officials are worried that many applicants may resort to lying about their income and employment details in order to try and get credit in the current financial climate, and if lenders are not checking the details provided by the applicant many people that cannot afford to really take out credit may end up getting a credit card anyway, and will find themselves in unmanageable debt levels.

One official from uswitch.com said: “The credit squeeze will back some consumers into a corner and, in sheer desperation, people will resort to lying about their salaries as this is such an easy loophole to exploit.”

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