Banks may be taking cards from reliable customers and giving them instead to riskier ones in order to boost their profits, a senior MP has suggested.
Banks may be taking cards from reliable customers and giving them to riskier ones instead in order to boost their profits, a senior MP has suggested.
The chairman of the treasury select committee, John McFall, says companies may be withdrawing cards from people who pay their bills on time.
The chairman of the treasury select committee, John McFall, said companies might be withdrawing cards from people who pay their bills on time.
The suggestion is they are being given instead to people who pay interest because they cannot clear their debts.
Instead, he said, they were being given to people who pay interest because they could not clear their debts.
Such practices "have to be called into question", says Mr McFall.
UK payments association Apacs said companies were free to make changes.
But Mr McFall said such practices "have to be called into question".
Making a profit
He has previously complained that credit card companies were not being transparent. Now he says they may not be being fair to their customers.
He has previously complained that credit card companies were not being transparent. Now he says they may not be being fair to their customers.
"Are we witnessing a situation where credit card companies are taking cards away from perfectly safe customers who pay their bill in full every month on the same date for years - and giving it to customers who are riskier?" he said.
"Are we witnessing a situation where credit card companies are taking cards away from perfectly safe customers who pay their bill in full every month on the same date for years - and giving it to customers who are riskier?" he said.
"And if they are doing so, then their methods have to be called into question."
"And if they are doing so, then their methods have to be called into question."
The BBC's Sarah Pennells said that credit card company Egg was recently accused of closing the accounts of some reliable customers.
The letter inferred that it was due to a change in my circumstances and that it was for my own benefit Steve Perry, credit card holder
Jemma Smith from Apacs, the trade association for payment services, said companies have the right to make changes as they see fit.
"A credit card company is a business and it will always be looking to do one of two things: either making sure that it's lending money responsibly to people who can afford to repay any money that they're borrowing, and secondly, as a business that needs to make a profit, deciding whether it wants to give you and I a card," she said.
"And at any time it may decide to take that business away."
Credit card holder Steve Perry said he recently had his credit limit dramatically cut, despite having a near-perfect credit rating.
Before Christmas, he received a letter from Goldfish saying his credit limit had been reduced from £11,300 to £500.
He told BBC News 24: "The letter inferred that it was due to a change in my circumstances and that it was for my own benefit."
The BBC's Sarah Pennells said credit card company Egg was recently accused of closing the accounts of some reliable customers.
Now there is some evidence that credit card companies are cutting the limits of older card holders, who pay off their balances in full, and raising limits for younger ones who may not, our correspondent added.
Now there is some evidence that credit card companies are cutting the limits of older card holders, who pay off their balances in full, and raising limits for younger ones who may not, our correspondent added.
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