The online bank Egg are apparently writing to 160,000 customers who they claim represent a credit risk telling them that their credit facility is being cancelled in 35 days time. The suggestion is that those who have problems with their credit are being refused further credit. 160,000 customers represent 7% of the customers customers so we have to wonder why so many people were accepted in the past but are now not considered a safe credit risk.
What is even more suprising is that talk in the forums is that the people having their credit facility withdrawn are in many cases people with excellent credit ratings and they usually pay off their credit card debt in full each month. When we hear this it puts a totally different perspective on the change.
Clearly the banks, having lost millions with their foolish investments in the US martgage market, are attempting to maximise profit. It has seemed obvious that people paying off their credit cards each month make no profits for the banks and may even cost them money so perhaps this is no great surprise.
It does signify a change in banking and perhaps we are heading for an era where people have to pay for their banking facilities rather than rely on poorer people paying penalty fees and charges supsidising the better off.

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Filed under: Banking • Debt

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