Will lenders follow Egg?

| February 5, 2008 | 0 Comments

Internet bank, Egg, recently withdrew the credit cards belonging to 161,000 customers whose credit profiles have deteriorated since they signed up.

The move is the first such action taken by a UK credit card issuer and has caused outrage from customers.

Other financial institutions are tightening their lending criteria with HSBC rejecting 50% of all applicants for credit cards and Barclaycard blocking some cash withdrawals.

David Kuo, head of personal finance at Fool.co.uk, believes that further cancellations at short notice are in the pipeline.

In a recent survey, Fool.co.uk established that one in eight cardholders have had their credit limits cut. One in a hundred cardholders have had their cards cancelled but it is customers between 34 and 49 years of age are especially vulnerable concluded Mr Kuo.

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