tisdag 10 januari 2012

How The Credit Crunch Is Affecting Existing Credit Card Customers

You might wonder why or how the credit crunch can perpetuate to affect the everyday finances of people in UK? Don't forget it's not just the fact that the cost of living perpetuates to soar; lenders are now putting limits on the level of credit we have available.

Different aspects of the cost of living have incremented, even month on month, things like utility bills food resturants and cafes, alcohol and even package holiday costs have incremented from April 2008 compared to March 2008. This is because of the elevating external costs to the companies operating in these goods and accommodations.

It would also make sense for loan and mortgage lenders to tighten their lending criteria, and we've visually perceived that over the first few months of spring lenders have indeed made it more difficult for people to get hold of credit. I think this is a good thing in the light of mortgages and loans including secured loans. Something like 60 per cent of people who consolidate their debts with a loan will then use additional loans and other forms of credit to, perhaps, fund a lifestyle they simply cannot afford. It is time for people to wake up and budget within their means.

However, what I do not accede with is the recent 2.5 million or so credit card customers who've had restrictions put on their accounts because of the credit crunch! Forgive me for thinking this way but wasn't it the banks that got us into the credit crunch mess in the first place? If they had not lent money irresponsibly to people who could not afford the repayments this would never have transpired?...

Credit card companies have cut spending limits, issued annual fees and even closed some accounts. But what makes this even more fulminating is that many of these customers are ones who utilize their credit card occasionally and generally pay off the balance in full. i.e the kind of customer that doesn't genuinely make any profit for the banks! Suprise, suprise, it's all boiled down to money, or should I verbally express, profit for the banks. As if the banks profit margins weren't immensely colossal enough already, it's the average, every day customers who are now having to pay for their mistakes.