MP worried over bank cards
February 27, 2008
An MP has expressed concerns over how some banks are treating their credit cards customers, claiming that some of these banks may be cancelling the credit cards of customers with good credit and who repay their balances responsibly, and are instead handing out cards to those with bad credit in order to try and make more money.
The report comes just days after the lending giant Egg announced that it was withdrawing the cards of tens of thousands of customers, many of whom were found to have excellent credit.
John McFall, the chairman of the Treasury Select Committee said that he was concerned that some lenders may be taking away the credit card facilities of this that make repayments on time simply because they were not making enough money from them, and they were looking to find ways of increasing revenue at a time when the global credit crunch has created havoc in the financial markets.
Officials from APACS have denied that the UK’s banks are withdrawing cards from good credit consumers in order to make more money. The officials claimed that lenders were looking at credit levels rather than withdrawing cards.
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.”
However, an APACS official said: “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.”
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