UK credit cards providers are loosening
application criteria and increasing charges, according to a study
by price comparison website Confused.com.
The study concluded credit cards are easier to
attain than last year, especially for unemployed or people on lower
incomes.
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Confused.com compared UK credit card market
year to year from July 2011 and found 23 credit cards would accept
unemployed clients compared to 17 the previous year.
The minimum income required for a platinum
credit card has decreased by 36% from an average of GBP 18,425 (USD
28,886) in 2011 to just GBB 11,838 (USD 18,559) this year.
The number of credit cards available and aimed
at people with substandard credit scores or limited credit
histories have increased by more than half from five last year to
11 in 2012.
Simultaneously, borrowing has become more
expensive due to a rise in average fees and charges. Average
balance transfer fee has increased from 2.27% in 2011 to 2.81% this
year. Representative APR went up from an average of 18.5% in 2011
to 20.5%.
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By GlobalData“As credit card providers make more cards
available to more people, we are warning consumers of the danger of
debts, as it appears to be increasingly easy to obtain yet more
expensive to get rid of of,” Confused.com head of credit cards
Nerys Lewis said.
“However, credit cards can offer consumers a
number of benefits, such as earning rewards on their spending,
offering purchase protection and improving their credit scores, so
we’re simply urging people to use them in a responsible manner,” he
concluded.
