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More credit card applications rejected
There are more applications for credit cards being rejected now than in previous years, a spokesperson for UK
payments body Apacs has claimed.
The comments came after figures released by Barclays Bank showed that the bank
had beaten its initial annual profit forecasts with figures of more than £7 billion. But the company said that it would take £2.2 billion against bad and doubtful debts, up 37 per cent from last year's £1.57 billion.
However, the Apacs spokesperson said that the bad debt figures related to lending that was undertaken two or three years ago, rather than bad debt that was coming through now.
More credit card applications were being rejected now than before, due to the banks tightening their lending criteria rather than fewer people applying for credit cards, the spokesperson said.
"I think there has been quite a large change in perspective over the last couple of years, and Barclays particularly has adopted a very pro-active, responsible lending policy," the spokesperson commented.
Recent figures from the British Bankers' Association showed the amount Britons spent on their credit cards fell by £496 million in January.
Credit card charge 'could open floodgates'
Banks may start charging credit card customers who do not use their accounts often enough, it has been claimed.
Switching service uSwitch.com said that other banks may follow the lead of Lloyds TSB in implementing charges for low-usage consumers and that fee-free credit cards could even be discontinued in the future.
Lloyds TSB has announced that in a one-off move it will implement a £35 fee for some low-usage credit card customers. The fee would affect just one per cent of low-usage customers, it said, although it did not specify the criteria used to select which customers would be charged.
However, the move "could open the floodgates" for other credit card providers who are trying to regain lost revenue following the Office of Fair Trading's reduction of banking penalty charges last year, director of financial services at uSwitch.com
Nick White claimed.
"More now than ever before, consumers should be keeping a very close eye on the small print and the correspondence they receive from their bank.
"By voting with their feet, customers can make sure they are not being ripped off by underhanded revenue generating tactics which simply add to profits."
Neil Simpson is a former Personal Finance Journalist of the Year and writes regularly on pensions, property, insurance and investment issues for the Mail on Sunday, City AM newspaper and many other publications.