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UK Credit Crisis Top News about Credit Cards!
2008-02-07 06:36:04

UK Credit Card Deals - Will Lenders Follow the Example of Egg Bank?

The Internet bank Egg took drastic actions in order to prevent credit card delinquencies of its bad debt cardholders. About 160,000 of its clients will soon receive a letter informing them about credit card cancellation.

Approximately 7% of Egg's clients will be shocked to discover they are deemed "high risk" customers. It means that in 35 days credit cards provided by Egg Bank will simply cease to work. The most frustrating thing about this action is that cardholders with excellent and good credit histories will face the same difficulties as the customers with spotty ones. How can it be? What's the point?

In the light of the recent economic moves, this action may not be so surprising for financial experts and analysts. Shocked were Egg's customers carrying good credit cards who found themselves helpless in the face of credit cancellation. Though credit card payments can still be made, cards of those affected by this action, may be thrown in a trashcan, for they will be absolutely useless.

Most of the time, we hear about those irresponsible bad cardholders who get into another mess because of their carelessness, and lack of proper credit knowledge. In the world of credit, lenders treat everything on their own way. Meaning, credit accounts that don't bring them any money, are of no use for them. Every action that boosts their profit is fair, no matter how customers treat this action.

This way, customers who cannot make credit card payments and those who clear their balances every month generate no income for the company. That's why creditors want to get rid of such customers and reduce their running costs as well.

While we are quite aware of the difficulties associated with bad credit, we must accept the fact that most lenders are not so willing to take this responsibility, especially now that credit crisis goes forward on a steady gait.

Increasingly, worldwide banking organizations report about unbelievable losses caused by credit spending slowdown and the ever-increasing number of credit card delinquencies. Creditors do their hardest to stay afloat. And the actions they take happen to be out of the blue for regular customers. The question is, what can be done in this situation?

Speaking of plastics, we must point out that the competition in this industry is still severe. Though lenders are now having certain difficulties, the situation in this industry is not so awful. If one lender cancels your plastics, you are free to choose another creditor and other credit cards. That's definitely a rush action taken by Egg Bank.

Meantime, thousands of irritating credit users keep on posting sarcastic online messages stating they're going to pay off the entire balance on time just to give as good as they got. Most probably, excellent credit users won't face any difficulties while applying for new credit cards. Yet Egg Bank may lose crowds of its existent customers. Now it's too early to speak about the winners and losers of this game, time will show.

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