Is credit becoming impossible?

In early February 2008, more than 160,000 customers with Egg were informed that their credit cards were going to be either withdrawn or their credit limits significantly reduced.

The decision to curtail lending will affect those customers who have exceeded their credit limits or missed several monthly repayments. Egg has also re-evaluated the credit of those who it fears are in danger of becoming high risk.

Unfortunately, it has was also released by the Guardian that some customers who display no high-risk behaviour, and who actually pay off their credit cards each month, have had their credit cards cancelled.

More to Come?

There is now growing concern that other lenders will follow in Egg’s footsteps. This growing concern is fuelled by the realization that tightening profit margins are forcing lenders to significantly limit their exposure to bad debt.

Even if all other lenders do not follow in Egg’s example, it is expected that consumers will see increased use of flat user fees and reduced interest-free periods. This increasingly sceptical market for lenders is not good news for anyone hoping to rely on credit.

How You May be Affected

In 2007, Egg was purchased by the US bank Citibank. When a company of this size takes such decisive action as this, the consequences are felt throughout the financial world.

Some are predicting that even those who are not customers of Egg will feel the aftershocks of this decision. It is possible that other banks will follow suit and revoke credit in a similar manner, or they may simply become more stringent with their lending policies.

Either way, credit consumers should be prepared for greater difficulty in finding a lender.

Do You Suffer From Poor Credit?

As borrowing requirements become more stringent, those who suffer under poor credit histories will be the first to feel the pinch.

Fortunately, Providence Cash Loans are designed to evaluate you on your ability to repay the loan – not any mistakes you may have made in the past.

	Apply for a Provident Cash Loan. Poor credit history need not stand in your way. Apply Today >>

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