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Balance transfer credit cards on their way out

Tue, 16 Dec 2008

According to analysis of the credit card market, experts report that the credit card industry is suffering as a result of the economic downturn and claim it is the customers who will suffer the most.

Though credit card profits have reportedly been increasing over the last 18 months, they are still drastically lower than 10 years ago, as a result annual fees for credit cards could be re-introduced and zero percent on balance transfers could be disappearing.

The changes in the market are also influencing the lending policies offered by credit card companies as well as a variety cut backs being made to customer credit limits. There have also been reports of data sharing about customers who regularly switch between balance transfer credit cards .

Credit card companies are also being subjected to new legislation on payment protection insurance, which has made the selling of insurance less profitable with more restrictions as a result of increased incidence of mis-selling.

Despite the attempts made by the Bank of England to ease pressure on homeowners by decreasing interest rates, there have been adverse effects on credit card lending with the average APR increasing by 0.7 percent over the last 18 months.
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