Credit card rejections on the increase

According to MoneyExpert.com, the financial comparison website, credit card rejections are up 17% compared to the 6 months to March 2007.

MoneyExpert.com said credit card companies are clamping down on applications and approximately 3.25 million have been rejected. After the recent turbulence in the credit markets, banks have had to tighten their lending criteria and new rules have come into force on credit card applications. At least 10% of Britons have been denied a credit card in the last 6 months.

Sean Gardner of MoneyExpert.com, said that it is no shock that credit card companies are becoming stricter on who they will lend money to. The majority of us are feeling the pinch after 5 interest rate hikes and credit is undoubtedly harder to come by than it has been for a long time.

Mr Gardner added that the main concern is for those who are already in debt will find it increasingly difficult to get themselves out of the red.

As a result of the credit squeeze, credit card companies have introduced a massive 31 different fee hikes over the last few weeks meaning consumers will be paying millions in charges.

A huge increase for withdrawing cash and rises in cash interest rates have been noted. Furthermore, banks and building societies have also increased commission on foreign use and increased balance transfer fees.

In spite of this, it is expected that credit card spending over the last year has smashed all previous record according to an industry report to be issued later this week.

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