Brits face higher credit card charges

StevieJ

Bad debts now 6% of cc balances, so looks like the people who pay their way will also have to cough up to the banks for those that don't, as usual

http://uk.finance.yahoo.com/news/corrected-britons-face-higher-credit-card-charges-reuters_molt-df5430241499.html;_ylt=Aifh69ehcdqAm1J71fDu2cLKk7J_;_ylu=X3oDMTE2MmdwYjg5BHBvcwMzBHNlYwN0b3Atc3RvcmllcwRzbGsDY29ycmVjdGVkLWJy?x=0

izools

That's the way credit works. Interest is charged in away to make a margin and cover other people's bad debts.

If there was never to be any bad debt I would imagine less that 10% of applicants would be approved. Credit is a risk based product and there will always be a percentage of unpaid debt; which will inevitably get worse during a recession and even worse in a time of tax on tax on everything, resulting in even less disposable income in a household budget.

It is just the way of things...

And anyway, those with a proven history of being flawless with credit obligations and are in a position whereby a creditor will see this, through an excellent repayment history, in a house with plenty of equity that they have lived in for a long time whilst also being gainfully employed in a well paid job for a long time will always be eligible for excellent rates courtesy of the likes of Zopa and Barclaycard Simplicity

NickX

More doom and gloom here :

http://www.dailyexpress.co.uk/posts/view/139101

bingy_burge

izools wrote: »

That's the way credit works. Interest is charged in away to make a margin and cover other people's bad debts.

If there was never to be any bad debt I would imagine less that 10% of applicants would be approved. Credit is a risk based product and there will always be a percentage of unpaid debt; which will inevitably get worse during a recession and even worse in a time of tax on tax on everything, resulting in even less disposable income in a household budget.

It is just the way of things...

And anyway, those with a proven history of being flawless with credit obligations and are in a position whereby a creditor will see this, through an excellent repayment history, in a house with plenty of equity that they have lived in for a long time whilst also being gainfully employed in a well paid job for a long time will always be eligible for excellent rates courtesy of the likes of Zopa and Barclaycard Simplicity

Really when I was opposed to people going down the cca unenforcable route I was told that other people not paying their debts had no bearing on those who do!!

I can't remember who its was maybe NID??!??!:mad:

NickX

bingy_burge wrote: »

Really when I was opposed to people going down the cca unenforcable route I was told that other people not paying their debts had no bearing on those who do!!

I can't remember who its was maybe NID??!??!:mad:

Well the articles linked are views from Price Waterhouse Coopers (PWC).

MSE Martin appears to have a different view :

http://forums.moneysavingexpert.com/showthread.html?t=2066361

StevieJ

NickX wrote: »

More doom and gloom here :

http://www.dailyexpress.co.uk/posts/view/139101

The group says it is likely credit card companies will begin to target customers who actually make them money, meaning those who always pay off their cards on time may be refused credit altogether.

Who writes these articles the cc companies receive a % of purchases, it is not just about credit, I think 2% (or whatever it is) with balances paid in full is still profitable.

bingy_burge

StevieJ wrote: »

The group says it is likely credit card companies will begin to target customers who actually make them money, meaning those who always pay off their cards on time may be refused credit altogether.

Who writes these articles the cc companies receive a % of purchases, it is not just about credit, I think 2% (or whatever it is) with balances paid in full is still profitable.

If thats the case why do you get interest free for 56 days? Why is it within the t & c's?

I was always lead to believe that they make money from 'balance clearers' as they get a percentage fee on all purchases.

StevieJ

bingy_burge wrote: »

If thats the case why do you get interest free for 56 days? Why is it within the t & c's?

I was always lead to believe that they make money from 'balance clearers' as they get a percentage fee on all purchases.

I thought that it what I had written the 56 days credit is set against the 2% commission and stil leaves a profit.

vaughny_2

What is bad debt? Is it dept from people who have gone bankrupt?

redpete

vaughny wrote: »

What is bad debt? Is it dept from people who have gone bankrupt?

It is debt that is not paid off by the people who owe it.

izools

bingy_burge wrote: »

Really when I was opposed to people going down the cca unenforcable route I was told that other people not paying their debts had no bearing on those who do!!

I can't remember who its was maybe NID??!??!:mad:

I think it's fair to say that the virtue of common sense teaches us that unpaid debt must have an effect on interest rates!