Egg on the face of credit card customers

Writing by Paul on Tuesday 5 February 2008

161,000 Credit Cards Withdrawn

In a move to eliminate financial risk, Egg has withdrawn the credit card facilities of 161,000 (about 7%) of its ‘riskiest’ customers. Egg’s parent company Citigroup has put pressure on the online bank as it begins to reduce financial risk within its business portfolio and attempts to increase profitability for its shareholders.

Secured Lending v Unsecured Debt

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As The Motley Fool’s personal finance and money expert David Kuo suggests, this is a likely reaction to the ‘credit crunch’ and that more financial institutions and banks will follow suit to avoid getting their ‘fingers trapped’. Kuo predicts that by 2012, 7 out of 10 credit card applications will be rejected. It may also be the case that lenders will attempt to persuade customers to take home-owner loans, giving better guarantees of financial security to banks, whilst slowing down the relatively relaxed availability of unsecured credit that the market has seen over the last few years at the same time.

Has your credit card limit been cut?

1 in 8 people have had their credit card limits cut and 1 in 100 have had their credit cards cancelled according to David Kuo. Those people who are already struggling to balance the books may now have fewer options to re-finance or to get better interest rate deals elsewhere. As a result, some may even find that they cannot even make the minimum payments to their credit cards or personal loans.

In the Red

stop-consider-advice-from-a-free-debt-advice-organisation-like-payplan.jpgRe-financing may not be an option, and for those who are beginning to feel the pinch in their pockets, are missing credit card payments or who are simply finding that their current account is eating away at their monthly income as their overdrafts increase, it may be time to stop and consider your options. Speaking to an experienced debt adviser from a free debt help organisation like Payplan may be the answer.

Free Debt Help from Payplan

Payplan can offer free debt help and support when you most need it, no matter what your situation. Debt can understandably be a difficult issue to discuss, but at Payplan you will speak to experienced, professional and non-judgemental advisers who will give you constructive and efficient debt advice. Call Payplan on 0800 917 7823 or submit your debt problem online for free debt advice and find your debt solution within 24 hours.

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