The Bank of England has recently stated that credit card customers are likely to keep the credit card limit they have or see it reduced. Because of so many credit card holders in default it is unlikely that the banks will lend more to credit card holders. There is also talk that the terms of the credit cards will change.
Interest rates on credit cards have not been reduced even though the cost of finance has dropped recently. Because consumer credit is still considered risky the banks are in no hurry to approve higher credit lines, but they don’t have a problem with lowering them. They have much less risk involved if they lower a credit limit, and customers should be prepared for this to happen.
There is also talk that the credit scoring criteria will be much more intensive. Because of this, getting a new credit card without having a stellar credit rating may be non – existent.
All of the major banks in the UK: Barclays, HSBC, Lloyd’s Banking Group, Royal Bank of Scotland, Banco Santander and Nationwide have made it known that they do not expect to expand credit to consumers in the near future.
