If you’ve seen the news today you’ll have seen that there is going to be a major change in how credit card companies issue their credit cards. In the past your financial information has been available out there, but for the most part one company didn’t know your financial situation as it exists between you and other credit companies.
Now, however, credit card companies will be sharing your information.
As well as this, credit card companies will be given information from your bank account. So, a credit card company will now be given your details from other credit card companies, as well as from your bank.
The information was always available to financial institutions when a borrower has exceeded their limit, or has outstanding balances to be addressed. Now the financial institutions have unlimited access to financial information on everyone about:
- How much is a person has spent on each of their cards each month;
- How much a person has repaid on each card each month;
- How much money that person has taken out of each credit card or account each month;
- Whether that person has made any recent changes to their borrowing limits;
- Whether that person has written any repayment cheques that bounce;
The reason this has started to happen is that there is an overall consensus that the banks and credit card companies are giving people too many debt opportunities, leading to too many people being in too much debt.
The banks and credit card companies have said that their aim is to help their customer, and nothing else.
The chief executive of egg Paul Gratton has said: “"By sharing more information, we are better placed to help customers manage their borrowings and avoid financial difficulty."
The changes have been welcomed by the Citizen’s Advice Bureau. CAB’s Peter Tutton has said “It doesn't deal with how lenders market other loans - for instance, offering to consolidate loans that just makes the problem worse".
The problem with this new development is that an honest hard-working individual may, at some particular time, fall into a little bit of financial difficulty, and because of this may not be able to get some additional help when the going gets tough.
This will require you to look harder to find the relief you may need.
There is help out there, though: Websites such as Moneynet have been developed to provide you with all of the information you need to choose the right financial setup for you.
To have a look at the best credit card companies for your needs, and for all of the information you need about credit cards Moneynet ( http://www.moneynet.co.uk/credit-card-guide/index.shtml ) offers a complete guide to credit cards, and offers you the option to search for the best credit card for you.
Rachel lives in Scotland and writes for the personal finance blog Cashzilla:
Phone: 0131 561 2251