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"More than 50 percent of clients being turned down by credit card giant"

By admin | August 21st, 2009 | Credit Cards

Credit card giant Barclaycard has recently revealed that it is turning away more than 50 percent of credit card applicants, after identifying that they could be in financial difficulty and may therefore struggle to make repayments on the credit card.

With the recession still gripping the UK the card issuer fears that many of those applying for a credit card may be in a bad financial way and could quickly find that they are unable to keep on top of repayments. It is therefore turning many of its applicants away.

The credit card giant has also revealed that it may be increasing the interest rates on its credit cards this year as a result of the increased risk associated with credit card lending in the current financial climate.

The company also said that in the last two months alone it has contacted around eleven thousand customers, where it has picked up that they could be in financial difficulties. The lender is aiming to be quicker to spot when customers are falling into financial problems.

As part of assessing the financial status and stability of customers the lender said that it was “starting to look at when they used to pay us off in full and were now making only a minimum payment or their spending on the card is rising”.

The lender had to tighten up on lending criteria after experiencing a huge debt problem after moving into the mass market. It now has over ten million customers in the UK.

The card giant also claims that it has helped to bring democracy to credit, with one official stating: “If you think back to when the credit card industry started 30 or 40 years ago you had to go down to the local bank and make your case to the bank manager and if he liked the look of you you’d get it. One of the great things about Barclaycard is we were one of the first institutions to give credit to women without requiring a male signature. That’s the democratisation of credit.”

Tags: barclaycard, credit card applications

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