I’ve read with interest reports in the media this week about the UK credit card market.
One report indicated that credit card lending barely increased in June, the first time that the monthly figure has hardly moved since 1994. Apparently, lending only increased by £43 million to a whacking £212 billion. The increase in May was £200 million. The suggested reasons for this slowdown in growth? Well it’s suggested that record debt levels, rising unemployment and pension worries are giving consumers cause for concern so therefore this is persuading us all to try and improve our finances.
Another report relating to Barclaycard indicates that the UKs biggest credit card lender has endured a profits slump because it is being hit by bad debt losses. The solution? A tightening of its lending criteria – around 50% of all its credit card applications are being declined.
Why my interest? Well, I promote several UK credit card offerings here and any general increase in declined applications won’t be great for personal finance affiliates. Sure, some merchants do pay something for declined applications but nowhere near as much as successful applications.
Am I worried? No, not really. Not yet anyway. I think that balance transfers will still be popular as long as the market promotes them and there will be still be a big market for first time credit card applicants from all credit backgrounds. We’ll see.