Recently the credit card company Egg have revealed that they will be withdrawing 160,000 credit cards from their customers. They are withdrawing the cards from people who they believe to be a high financial risk but many people have questioned whether this is really the reason.
Many people have been posting on online blogs demonstrating their anger about having their credit card taken away from them. Many say that they do not owe the bank anything and always pay their monthly balance. This suggests that they are withdrawing cards from those customers who are not profitable.
It has not been proven yet so we should not jump to any conclusions. Just last year, saw them being bought out by a large American enterprise and as a result, the company conducted credit checks on all of their customers. The result of the withdrawal of 7% of its customers could easily be legitimate and could result in larger savings for their existing customers. Those who have to give up their credit card have not been set a date yet when all debts must be settled but the company has confirmed that they will not be looking for immediate repayment.
If the company has chosen to discard those who simply aren’t creating enough revenue for the company, they are taking a huge risk. The chance of them attracting new customers will be very limited if the accusations are true.
If you are unfortunate enough to have been one of those 160,000 then the answer is simple; switch. The other providers will all be vying for the business of all these customers so the deals will be available for the customers to choose the best credit credit card for them.
Monday, April 6, 2009
redit Cards – Getting the Card you Deserve
The recent move by one of Britons biggest card providers, Egg, to cancel 161,000 of its customer’s credit cards’ has left many consumers anxious.
The move was supposedly made to protect Egg, as they stated they targeted only “high risk” customers. However, it has been found that those who repay their balances in full each month and have a relatively good credit rating were also affected.
If you are one of the many that were affected by the “crack down”, and are seeking a new credit card then there are a number of measures you can take to help get the card and rate you deserve.
Firstly you need to determine what exactly you require from a credit card, this should be based on what you want the card for and how you will use it. This should help you decide between balance transfer, introductory purchase, and standard rate or cashback cards.
Secondly, you need to ensure you have a squeaky clean credit record. The slight leniency banks and card companies once offered has practically vanished because of the credit crunch.
For instance, an applicant with a slightly imperfect credit rating, applying for a credit card about six months ago was likely to have been accepted, and with a reasonable APP. Today though, the same applicant will either have to pay a vastly inflated APR or be flat out declined.
From the lenders perspective, they’re always going to favour applicants who are deemed less of a risk.
The best ways to improve your chance of approval is to therefore take steps to improving your credit rating. For example, if you have access to many lines of credit then it’s always a good option to cancel and close the credit cards you do not use.
With banks and credit cards providers making it harder then ever to get a card, and at a decent rate, then it’s advised to get a good scope of the credit cards market online.
The move was supposedly made to protect Egg, as they stated they targeted only “high risk” customers. However, it has been found that those who repay their balances in full each month and have a relatively good credit rating were also affected.
If you are one of the many that were affected by the “crack down”, and are seeking a new credit card then there are a number of measures you can take to help get the card and rate you deserve.
Firstly you need to determine what exactly you require from a credit card, this should be based on what you want the card for and how you will use it. This should help you decide between balance transfer, introductory purchase, and standard rate or cashback cards.
Secondly, you need to ensure you have a squeaky clean credit record. The slight leniency banks and card companies once offered has practically vanished because of the credit crunch.
For instance, an applicant with a slightly imperfect credit rating, applying for a credit card about six months ago was likely to have been accepted, and with a reasonable APP. Today though, the same applicant will either have to pay a vastly inflated APR or be flat out declined.
From the lenders perspective, they’re always going to favour applicants who are deemed less of a risk.
The best ways to improve your chance of approval is to therefore take steps to improving your credit rating. For example, if you have access to many lines of credit then it’s always a good option to cancel and close the credit cards you do not use.
With banks and credit cards providers making it harder then ever to get a card, and at a decent rate, then it’s advised to get a good scope of the credit cards market online.
Credit Cards- Egg on your Face But not in your Wallet
Recently the credit card company Egg have revealed that they will be withdrawing 160,000 credit cards from their customers. They are withdrawing the cards from people who they believe to be a high financial risk but many people have questioned whether this is really the reason.
Many people have been posting on online blogs demonstrating their anger about having their credit card taken away from them. Many say that they do not owe the bank anything and always pay their monthly balance. This suggests that they are withdrawing cards from those customers who are not profitable.
It has not been proven yet so we should not jump to any conclusions. Just last year, saw them being bought out by a large American enterprise and as a result, the company conducted credit checks on all of their customers. The result of the withdrawal of 7% of its customers could easily be legitimate and could result in larger savings for their existing customers. Those who have to give up their credit card have not been set a date yet when all debts must be settled but the company has confirmed that they will not be looking for immediate repayment.
If the company has chosen to discard those who simply aren’t creating enough revenue for the company, they are taking a huge risk. The chance of them attracting new customers will be very limited if the accusations are true.
If you are unfortunate enough to have been one of those 160,000 then the answer is simple; switch. The other providers will all be vying for the business of all these customers so the deals will be available for the customers to choose the best credit credit card for them.
Many people have been posting on online blogs demonstrating their anger about having their credit card taken away from them. Many say that they do not owe the bank anything and always pay their monthly balance. This suggests that they are withdrawing cards from those customers who are not profitable.
It has not been proven yet so we should not jump to any conclusions. Just last year, saw them being bought out by a large American enterprise and as a result, the company conducted credit checks on all of their customers. The result of the withdrawal of 7% of its customers could easily be legitimate and could result in larger savings for their existing customers. Those who have to give up their credit card have not been set a date yet when all debts must be settled but the company has confirmed that they will not be looking for immediate repayment.
If the company has chosen to discard those who simply aren’t creating enough revenue for the company, they are taking a huge risk. The chance of them attracting new customers will be very limited if the accusations are true.
If you are unfortunate enough to have been one of those 160,000 then the answer is simple; switch. The other providers will all be vying for the business of all these customers so the deals will be available for the customers to choose the best credit credit card for them.
Credit Cards – Banks to Start Sharing Information
Credit card companies are about to start sharing their customers’ information with other banks in an attempt to rid themselves of customers who do not make them any money.
Those likely to suffer the most as a result of this change will be people that the banks refer to as ‘high risk’, which include; those who withdraw money from their credit cards and those who have significant changes in their credit limit.
This proposal has been discussed with industry bodies for a few months now and would mean that banks would be able to recognise those customers who regularly clear their balances in full and those who continuously switch to 0% interest deals, which do not bring in profit for the bank.
This news comes at a very tentative time for customers, as it is not long since the company, Egg, released their news that they were cancelling 160,000 of their customers’ credit cards . According to Egg, the cards they were cancelling belonged to ‘high risk’ customers who had done such things as; missed some payments or borrowed money that they could not afford to pay back.
This contentious decision made by Egg was followed by many customers complaining that their credit cards had been cancelled even though they had not missed a payment or been clearing their balances every month. This news lead to speculation arising as to whether Egg had cancelled the cards simply to rid themselves of their unprofitable customers, and this is exactly what will become a lot easier to do once the credit card companies start sharing information.
Banks have always shared information on customers but only to the extent of when their card was issued, when it was closed, the balance in the account and whether or not there had been any missed or late payments on that credit card. However, come Spring, customers can and no doubt will be checked by other banks to see if they have taken advantage of 0% interest deals and they will also be scrutinised to see how quickly and to what extent their balance is paid off.
This new sharing idea is the result of a two year study conducted by Apacs, the UK payments authority, who claims that it will help lenders to assess risk better. However, consumer groups say that it will mean that more customers are denied credit.
Some credit card companies have already started asking customers, who do not use their cards often, to justify why they need them, whilst another company has issued a £35 inactivity fee to those customers who have not used their cards for more than a year.
A recent survey, which was conducted before the credit crunch, has found that there has been a 10% increase in the number of rejections for credit cards. The credit-reference firm, who discovered the increase, have said that minor discrepancies, such as paying your telephone bill a bit late, may have been overlooked in the past but may not be any longer.
Those likely to suffer the most as a result of this change will be people that the banks refer to as ‘high risk’, which include; those who withdraw money from their credit cards and those who have significant changes in their credit limit.
This proposal has been discussed with industry bodies for a few months now and would mean that banks would be able to recognise those customers who regularly clear their balances in full and those who continuously switch to 0% interest deals, which do not bring in profit for the bank.
This news comes at a very tentative time for customers, as it is not long since the company, Egg, released their news that they were cancelling 160,000 of their customers’ credit cards . According to Egg, the cards they were cancelling belonged to ‘high risk’ customers who had done such things as; missed some payments or borrowed money that they could not afford to pay back.
This contentious decision made by Egg was followed by many customers complaining that their credit cards had been cancelled even though they had not missed a payment or been clearing their balances every month. This news lead to speculation arising as to whether Egg had cancelled the cards simply to rid themselves of their unprofitable customers, and this is exactly what will become a lot easier to do once the credit card companies start sharing information.
Banks have always shared information on customers but only to the extent of when their card was issued, when it was closed, the balance in the account and whether or not there had been any missed or late payments on that credit card. However, come Spring, customers can and no doubt will be checked by other banks to see if they have taken advantage of 0% interest deals and they will also be scrutinised to see how quickly and to what extent their balance is paid off.
This new sharing idea is the result of a two year study conducted by Apacs, the UK payments authority, who claims that it will help lenders to assess risk better. However, consumer groups say that it will mean that more customers are denied credit.
Some credit card companies have already started asking customers, who do not use their cards often, to justify why they need them, whilst another company has issued a £35 inactivity fee to those customers who have not used their cards for more than a year.
A recent survey, which was conducted before the credit crunch, has found that there has been a 10% increase in the number of rejections for credit cards. The credit-reference firm, who discovered the increase, have said that minor discrepancies, such as paying your telephone bill a bit late, may have been overlooked in the past but may not be any longer.
How 0 Per Cent Balance Transfer Credit Cards Have Changed
The ever increasing debt levels in the UK mean that getting a credit card is becoming more difficult as time goes by. Getting a credit card with a good balance transfer deal is becoming even more difficult as lenders tighten up their lending criteria.
It happened to me a few months ago; I was looking into transferring a balance from my existing credit card to another. On applying by telephone with the new credit card company they told me that I could transfer a balance but it was only around 75% of the total balance I was looking to transfer. This was obviously not really any good for me because I didn’t want to end up splitting the balance transfer over 2 new credit cards because it would cost me 2 balance transfer handling fees and also because it just seemed like untidy financial management to me. So I looked elsewhere and on applying with another card company they were happy to transfer the entire balance from my other credit card.
Over the last few years the balance transfer deals have got better in one respect because the 0% offers now top 12 months, I think the best is around 15 months at 0% when transferring a balance. However in another respect the introduction of balance transfer handling fees combined with the reluctance to let customers almost automatically transfer any balance amount to a new credit card, means that these deals aren’t what they used to be.
Of course you couldn’t really expect the credit card companies to let people transfer balances from card to card with no charge, forever. Back in 2004 this is how it was! Often referred to now as ‘rate tarts, customers could simply transfer their existing credit card balance to a new company with no charge and benefit from 0% interest on the balance transferred for months on end. Then when the 0% period came to an end they simply went through the same process. I think it was something like 2 or 3 years, certainly late 2006 or early 2007 before the credit card companies started their balance transfer handling fee charges.
Now credit card companies are tempting new customers with low APRs for the life of the balance transferred. The idea is a low APR like 5 to 6% Typical, for the life of any balances you transfer, is reasonable compared to the average UK credit card APR of 16%. Also it makes life easier for customers who do not want to keep switching their credit card every year or more often.
It happened to me a few months ago; I was looking into transferring a balance from my existing credit card to another. On applying by telephone with the new credit card company they told me that I could transfer a balance but it was only around 75% of the total balance I was looking to transfer. This was obviously not really any good for me because I didn’t want to end up splitting the balance transfer over 2 new credit cards because it would cost me 2 balance transfer handling fees and also because it just seemed like untidy financial management to me. So I looked elsewhere and on applying with another card company they were happy to transfer the entire balance from my other credit card.
Over the last few years the balance transfer deals have got better in one respect because the 0% offers now top 12 months, I think the best is around 15 months at 0% when transferring a balance. However in another respect the introduction of balance transfer handling fees combined with the reluctance to let customers almost automatically transfer any balance amount to a new credit card, means that these deals aren’t what they used to be.
Of course you couldn’t really expect the credit card companies to let people transfer balances from card to card with no charge, forever. Back in 2004 this is how it was! Often referred to now as ‘rate tarts, customers could simply transfer their existing credit card balance to a new company with no charge and benefit from 0% interest on the balance transferred for months on end. Then when the 0% period came to an end they simply went through the same process. I think it was something like 2 or 3 years, certainly late 2006 or early 2007 before the credit card companies started their balance transfer handling fee charges.
Now credit card companies are tempting new customers with low APRs for the life of the balance transferred. The idea is a low APR like 5 to 6% Typical, for the life of any balances you transfer, is reasonable compared to the average UK credit card APR of 16%. Also it makes life easier for customers who do not want to keep switching their credit card every year or more often.
Ask Yourself: Have I compared the best cash-back credit cards
The leader of the pack in the cash back credit card field, American Express Platinum credit card, is currently offering an incredible introductory cash back rate of 5%.
Whilst this sounds a pretty good initial offer, in reality it will get you 1.5% cash back if you spend more than £10,001 on the card in any year.
Still, if you spend a little over £13,000 during the first year on the best cash back credit card on offer at the moment, you’ll find yourself richer to the tune of £285 by the end of that year and by a further £201 a year after that.
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