Related Credit Card Article

"Credit card firms use personal pricing to set interest rates"

By Reno | April 22nd, 2010 | General

According to one industry group credit card providers in the UK are increasingly turning to personal pricing methods in order to set credit card interest rates for individual borrowers, and this is making it difficult for consumers to work out what sort of interest rate they are likely to be charged on a credit card.

The data comes from the independent financial research company, Defaqto, which claims that more and more credit card companies are using personal pricing in order to set interest rates on credit cards for borrowers, and this is resulting in those with damaged credit paying far higher rates than others.

When using persona pricing the credit card company takes into account the borrower’s personal details, credit history, and other factors in order to set a rate of interest for credit card borrowing. The research company also said that out of those people that were successful in getting a credit card two thirds tended to get the best rate whereas one third ended up with higher rates.

The research also showed that credit card firms are continuing to be extremely choosy with regards to who they are prepared to offer credit to, which means that many are still turning huge numbers of applicants away. With the lessons learned from the credit crisis, and with credit card firms still wary about taking risks on uncertain customers, getting a credit card has become a difficult or impossible task for some consumers.

A Defaqto spokesperson said: “It always used to be fairly straightforward to get a credit card but providers have become increasingly choosy about who they will lend to and, if they will lend, at what rate. Many consumers don’t even get to that stage because the number of credit card applications being rejected has shot up.”

Tags: interest rates, Credit Cards, Credit Cards, Defaqto, finance

Related Articles:

• Getting a credit card could become more difficult for consumers

  In the current financial climate many people are struggling with their finances, and this means that many are looking for financial support through various forms of credit. One of the types of credit that many people are looking to use to tide them over is credit cards, but some of those that try and get...

• Borrowers will receive help from credit card firms

  Credit card firms have spent more than their fair share of time in the financial news headlines for various reasons, and not always for the right reasons. Recently, credit card firms have come under fire as a result of the high rates of interest, charges, and fees that they are applying to customers’ accounts and...

• Credit Card Firms Keep Pushing Up Interest rates

  A recent report has shown that whilst the Bank of England has cut the base interest rate three times between December last year and April this year, and has kept the base rate on hold since April, many credit card firms have been increasing the interest charged for borrowing on their cards, making it increasingly...

• Rates on credit cards should be challenged

  A senior official from a consumer watchdog group in the UK has recently stated that credit card interest rates in the UK simply cannot be justified, and that these crippling interest rates need to be justified. The official, from the consumer group Which?, said that in some cases lenders are charging higher interest rates to...

• Credit card rates continue to rise

  For well over two years the base interest rate in the UK has stood at a record low of just 0.5 percent, which is the lowest it has ever been in the history of the Bank of England, spanning over three centuries. However, for the many people that thought their credit card interest rates may...

Other Recent Articles

Use of credit cards declines whilst payday loans increase

It seems that many consumers may have switching from spending on credit card that can sometimes come with high rates...

By Reno | February 10, 2012 | Read More

Useful Tips for Credit Card Holders

Modern technology offers comfort and convenience that is often helpful for people in a fast paced everyday living. With just...

By admin | February 7, 2012 | Read More

Credit card decision by Lloyds could have serious effect on charities

For many years now, a range of leading and well known charities have been able to boost the levels of...

By Reno | January 28, 2012 | Read More

Many have to rely on credit cards to make ends meet

There was a time when people had credit cards to enable them to pay for occasional larger, more expensive items...

By Reno | January 26, 2012 | Read More

Brits increasingly dissatisfied with credit card providers

According to recent reports, Brits are becoming increasingly dissatisfied with their credit card providers, particularly in the case of the...

By Reno | January 20, 2012 | Read More