If you want credit, be prepared to hand over a little bit more personal info to the data inquisition in future. That looks like being the inevitable end-result of an announcement by UK banks that in order to help you manage your credit more responsibly, they are planning to expand the range of data that they will share with one …
Say goodbye to good offers then...
Because there's no chance banks would let credit card tarts carry on as they have in the past. Which is a bit of a shame.
Ah well could be the end of a good thing!
I've managed to move my credit around the majority of card providers over the last 8 yrs or so. This has enabled me to pay off £8k of debt built up in my youth ;) with minimal interest payments.
The credit companies are already doing similar internally themselves, I took out a Nationwide card with 0% and then the month after the offer expired I requested to close the account they sent me a letter which in a nutshell told me to go screw myself and they would never offer me a "special deal" again!
Surely its the whole point of the "credit game" so not sure what they expect, who in their right mind would have a 22% APR card when there is one available at 0%! :s
For support and advice!
"customers who may be at risk from becoming over indebted, and who are in need of support and advice"
Ah, how kind of them.
Its purely for the banks' benefit. They don't mind being the ones who effectively own the debtor, dangling them on the minimum monthly payment string and building up a lifetime of dependency, but are a bit afraid that there are a load of other vampires who also have a claim to the remaining chattles of the debtor when they end up in court.
Helping those in trouble, or deterring people who can't actually afford any more credit is the very last thing on their minds.
So does this mean that the....
Banks already share the information on my 8 accounts and when all these bank mergers are finished I'll end up with 5 accounts. If so, what is the point of trying to have privacy. How much veanal criminality actually takes place when people have more than one account or credit card, why should it be appropriate to disclose my details and how much more will be charged for this ineffective credit control measure? Ahhh silly me, it'll all be paid for out of focussed advertsing cost reductions..... so that's all right then!
In the industry in which I work we find it much more efficient to report by exception when conditions require rather than floods of information within which detail can be lost. Gives us more time and resource to concentrate on the issues that really matter.
If the Banks knew their business then they'd know this...... Oooops what have I said.
I am sure that they will spin this as being part of their increased prudence.
But somehow I suspect this is really just aimed at filtering out the less profitable customers. Those that don’t rack up overdraft fees, pay credit cards in full and on time. The ones who take advantage of 0% offers as free loans but are organised enough to pay it off before the interest kicks in.
They will still throw credit at the people that make them money; it is the prudent people that will struggle to get a credit card etc because of this. This is just another way to up the profits at the expense of more of our data being pimped around.
A good customer is one who PAYS THE MINIMUM
IMHO, it should not be allowed. If you want credit, instead you should be required to list any other credit cards & balances, and giving a false statement would be obtaining credit by deception. i.e. you should give them the info, they should tap a central database.
Why would someone need a second visa card? Or a second mastercard? If the other banks won't increase their limit perhaps. If the balance isn't being transfered then why would you increase their limit?... they don't need to know whether you are a good customer to lend responsibly.
Also a good customer is one who maxes out the credit card and repays only the minimum...which is after all the best type of customer for the credit card companies. Someone whose done that for years is the ideal customer they are after.
A prudent card user, who pays doesn't keep a balance on the card and keeps the card for very occasional use, is a bad customer for the banks because they don't make profit from them.
So whatever they say about risk, they want to cherry pick the customers who make them money by not paying off their credit balance in one go, ideally long term balances with regular repayments. The opposite of what they are claiming.
Their commercial interest does not trump the customers right to privacy.
If you create a central available database of credit usage, then the Nutjobs in power will grab access to it.... you know the "if we don't grab access to this data it's like giving a license to terrorists" thinking these Nutjobs do. Best not to go creating any more databases while the unelected nutjob is in power.
"banks play by the rules"
And we all trust the banks now, don't we?
As a former credit tart
I'd like to thank all the credit card issuers for a decade of interest free balance transfers that I put in my savings account. Actually, thanks to their long term customers who actually paid for it all. I look forward to it all starting again as soon as the lemming like rush for growth starts again.
Taking a cash advance on a credit card?
Maybe Bill can afford those rates, but I don't know anybody else who can. If I'm taking cash out on my credit card, that means when me and ten of my friends dine out, I put the tab on my card and collect their portion of the bill from them.
is there anything for the ordinary punter to worry about in these proposals?
Hell, yes, there's plenty to worry about!
This is just another of those measures (like Chip and Pin and Verified by Visa) which are brought in "for the customers' benefit" which are actually really there to benefit the banks and card companies.
I'm sure they hate people like me because, when I moved house six years ago I maxed out my credit card, then I've been shifting it around 0% deals ever since effectively getting a six year £5000 interest free loan. Of course, to them, this simply means they're not making money out of me because I'm not paying stupidly inflated interest rates and I'm "costing" them the few pennies a year it takes them to run my account, and that's just not good enough.
If the Card Companies can see that I'm doing this, there's no way I'm going to be able to get new cards and then they can start charging me and many others lots of money...
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Aren't there any Data Protection laws against sharing personal financial data between different companies ?
Credit agencies already store credit limits, balances, etc
The basic data from a credit agency shows that they store credit limits on credit/store cards, the balance, payment history and the like. The other data would be new, although I wouldn't be surprised if it is being collected but not supplied.
I expect the problem is that many banks haven't been using that data, just the simplified (and expensive) credit rating score.
It is trivial for anyone who uses a credit agency to collate all the credit card information (or loan information, or mortgage information) to see how much credit has been made available to someone, and how much of it they have used, and how often they make payments (or miss them but catch up == profitable).
They shouldn't have introductory rates in my opinion and if they do people shouldn't be able to move between them.
The truth is that the people who don't take advantage of this (it's not designed to be used this way) end up paying in higher premiums and rates.
Personally I don't want to bother with all the hassle. But then again I'm against all sorts of cuts and deals etc I have an extreme point of view that people should just pay what something is worth, the same as everyone else.
Multiple Credit Cards
It's always a good idea to have more than one - if you only have one card and it gets compromised and cancelled, you're stuck. If you have two, then any problems with one (including disputes with the card issuer), you just stop using it and switch immediately to the other one. Someone in Italy decided to use one of my cards to buy airline tickets once, so I just switched to another one.
I also find that it helps to have one for 'must have' stuff, which is used for petrol and food and is paid off every month because it is only for basics (and so should be affordable), and another for discretionary spending for toys and gadgets and holidays. That also gets paid off every month but in the event of a misjudgement, it doesn't increase the cost of the basics.
As for credit tarts - you certainly can't fault them for doing it, it shows some level of control over finances to be able to manage it, even if the original need was due to getting into excessive debt in the first place. I know I did it once when I needed a loan and a credit card offer came through the door offering a better rate of interest than anything else on the market so I took them up on it. I also noticed that subsequent offers from that company had changes in the small print to stop me doing the same thing again (as in a requirement to actually use the card regularly).
I'm probably on the shit-list because the only times I've paid interest on a credit card was as idiot-tax when I forgot to make a payment in time, otherwise it's paid off in full.
In the good old days I had several different cards because I was bombarded with offers from everyone and his dog so I decided to see how many I could get. I lost interest at seven, and never used some of them so I'm down to a more reasonable number now.
There are some rules about sharing data between financial companies, such as making sure that people don't have multiple insurances for the same insurable item (car, house, etc) these are mainly to prevent fraud. There are also anti-money laundering laws.
It doesn't seem to be well known here, but the banks have come under a _lot_ of pressure to do this, there have been instances of people having five or ten cards, with different banks, running up tens of thousands of pounds of debt and the banks haven't know. A common tactic is to take out one card to pay for the payments on another, then run up further bills onit. Sadly, there have even been a few suicides when people just couldn't cope any more.
I am all for banks exercising responsibillity in their lending, it protects both the customer obtaining credit and those who have to foot the bill if another customer IVAs or declares bancruptcy.
For several years I made a nice little profit by taking out a card with 0% interest on purchases, charging all my spending to it, and putting the money into the best savings account I could find. At the end of the free period, I paid the balance off out of the account, and pocketed the interest.
Hven't bothered lately, as the deals are getting too restrictive.
Now I keep a Matercad with cashback, for most uses, a Visa so I am on both systems, and because it is guaranteed fee free for life if I use it occasionally, and an ASDA card, because you get 2p a litre off fuel.
All these are paid IN FULL by direct debit each month ( and I wouldn't have a card that didn't allow this - quite a few don't).
That's how to use a credit card.
Nah, they won't be separate companies soon. So the problem will be moot.
Look, banks, if you don't want rate tarts, stop offering incentives and deals to people to move to YOUR bank/card/whatever that you don't offer to your current customers. Because for every customer to moves to your bank will have left someone else's bank. And that someone else could be YOU.
What fuckwits are they, eh?
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