Consumers who are not even in employment could be lured into a deep pit of credit card debt by increasingly lax lending strategies, price comparison s…
Consumers who are not even in employment could be lured into a deep pit of credit card debt by increasingly lax lending strategies, price comparison site Confused has warned.
The portal has studied the minimum income requirements to get a card and discovered that this has fallen on average since last year, from £9,718 to £9,035.
Furthermore, the number of lenders prepared to offer cards to the unemployed has jumped by 26 per cent from 17 to 23, while more products are available for those with flawed credit histories.
Not only is it easier for those on low incomes or out of work to get cards, but when they do they will face higher average interest charges and fees.
The representative annual purchase rate has increased from 18.5 per cent last year to 20.5 per cent, while the typical balance transfer fee is up from 2.27 per cent to 2.81 per cent.
Head of credit cards at Confused Nerys Lewis said: “As credit card providers make more cards available to more people, we are warning consumers of the dangers of debt as it appears to be increasingly easy to obtain yet more expensive to get rid of.”
Some consumers may have learned the hard way of the dangers of piling up credit card debt and now owe large amounts of money.
In such a situation, good advice will be needed to help people to deal with creditors who might be unsympathetic to their plight.
Despite the increasing availability of credit cards, recent data has not indicated any large increase in this form of borrowing.
Finance and Leasing Association figures for the second quarter of 2012 revealed overall lending by its members was seven per cent higher in the period than in the equivalent part of 2011, but the value of credit card borrowing and personal loans was only up by one per cent.
Posted by Paul Thacker