Consumers can expect more credit card withdrawals
by Gill Montia
Online bank Egg’s decision to delist credit card holders with less than perfect credit histories could be followed by similar actions by other leading providers.
At the end of last week Egg, which was acquired by Citigroup only last year, announced that it was withdrawing the credit cards of 161,000 customers.
Card holders have been given 35 days’ notice of the cancellation, although existing balances will be paid off under the normal terms and conditions.
The move has prompted an outcry among consumers, not least Egg customers who claim they are being unjustly treated, but David Kuo, head of personal finance at Fool.co.uk, believes that further cancellations at short notice are in the pipeline.
All card providers regularly review their customers’ histories and Mr Kuo is warning that while many consumers could be caught “on the hop”, those aged between 34 and 49 are particularly vulnerable.
He comments: “In a recent survey, we discovered that one in eight card holders have had their credit limits cut. One in a hundred card holders have even had their cards cancelled but it is customers between 34 and 49 years of age who are most likely to be affected.”
Adding: One in six people in this age group say their credit limits have been reduced, and one in seven people in their early fifties have seen their spending limits shrunk.”
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