'Large numbers' cannot obtain a credit card

Britain is becoming divided in terms of those who cannot get a credit card and those who can.

This is the warning from the AA, which has urged the financial services industry to "work harder" at meeting the needs of customers, no matter what their credit requirements.

AA Financial Services director Mark Huggins told the Institute of Economic Affairs on Tuesday (March 23rd) that there had been a polarisation in the credit market following on from the banking crisis last year.

"The credit market trend is increasingly disenfranchising large numbers of the population who now either can't obtain credit at all, or can only do so if they are prepared to pay very high interest rates," he commented.

Mr Huggins went on to say that, while lenders need to adopt a responsible lending approach, there is no need to exclude millions of potential customers by being too risk-averse.

Recent research from Defaqto found that 79 per cent of credit cards allocate repayments to the cheapest debt first.

Posted by Martin Peacock