Some of the UK’s largest high-street banks are
restricting market competition by reserving the best credit card
deals for existing customers, analysts say.
The controversial practise of offering the
best credit card deals only to existing customers, or the richest,
boosted customer-only credit card issuance by over 462 percent
since 2007, research company Defaqto found.
Credit card companies are battling against a
declining credit card market in the UK and are becoming more
restrictive in the deals they are willing to give out. Revloving
credit card debt has declined every year since 2005 in the UK,
falling from a high of £218.2 billion ($340.4 billion) to the
current level of £170 billion. The current focus on existing
customers or wealthier individuals is a reflection of a reduced
risk appetite and a renewed focus on underwriting among issuers of
Which? Money editor James Daley called for the
FSA to investigate the increase of tied-together credit card
“[Consumer] are encouraged to take out one
product to get another one more cheaply — but they are not
necessarily the best deal for both,” he stressed.