Credit Card Firms
Below is an article relating to credit and debt.
Rate tarts cost credit card firms $1 billion
SO-CALLED "rate tarts" who continually switch between zero per cent finance deals on credit cards to keep their debts interest-free are costing the industry dearly, according to figures published today.
Balance transfer offers are costing credit card firms around £1 billion a year in lost revenue, according to PricewaterhouseCoopers.
Its study of the UK consumer credit market, Precious Plastic 2005, also predicts the number of adults holding a credit card will increase by a further three to four million over the next few years, meaning around 73 per cent of the population will own a credit card.
Credit cards and personal loans are also gaining market share from other consumer credit products, with a third of the £180bn of unsecured consumer debt in the UK owed to credit cards.
The number of cards in issue is expected to continue to rise, although the number of cards used will decline.
At present, only one in every seven new cards is issued to a consumer who does not already have one, though the report anticipates the growth of chip and PIN, where consumers will be required to remember a four-digit number to carry out a transaction, will lead to a drop in the number of cards a person uses.
Richard Thompson, partner at PricewaterhouseCoopers, said: "We anticipate that, in future, issuers are likely to become increasingly selective about which customers they offer balance transfers to."
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