Better Financial Awareness Most Likely Reason For Barclaycard Price Hike

Added: (Tue Oct 04 2005)

Pressbox (Press Release) - BETTER FINANCIAL AWARENESS MOST LIKELY REASON FOR BARCLAYCARD 2% PRICE HIKE
4 October 2005 Embargo: none, for immediate release

Credit experts at checkmyfile.com believe Barclaycard’s decision to increase interest rates by 2% is down to their most creditworthy customers voting with their feet, leaving them with a riskier portfolio of customers.

“Barclaycard said the move is driven by increasing bad debt levels, yet it has one of the most sophisticated risk assessment systems in the UK and has access to the most detailed of personal data available to help them measure risk” says Barry Stamp, Joint Managing Director of checkmyfile.com.

“It’s unlikely they would have lowered their risk hurdles allowing bad debt to have been taken on board at the levels that would warrant such a huge increase in the interest rate.

“It’s more likely their most creditworthy customers have simply moved their business to cheaper cards and loans.

“Barclaycard was first to market and has always benefited from the dilution effect of having a relatively high proportion of low risk customers. UK consumers are increasingly aware of what interest rates their credit rating can command and are moving away from more expensive cards. Many of Barclaycard’s competitors know this and will be actively targeting them right now, to get their card at the ‘top of wallet’ in time for the Christmas shopping bonanza,” said Stamp.

Checkmyfile.com offers a free service that uses a consumer’s credit score to find the credit cards and loans that are most likely to be offered and a free credit review service that saves its customers an average of £400 per annum in interest.

“Until relatively recently, credit scoring was the sole preserve of lenders enabling them to pick which customers they wanted. We now use credit scoring to help consumers pick the lenders they want instead,” added Stamp.


Note to editors:
Launched in 2000, checkmyfile.com is the UK’s first Internet based credit reference agency, aimed firmly at serving consumers. checkmyfile.com is fully independent and was the first in the UK to provide consumers with online access to their credit files, to offer consumers the ability to check their own credit score for free and to give plain English explanations of how credit scoring works. With over 1.1m registered customers and visited by over 20,000 unique new visitors every day, checkmyfile.com is ranked within the World’s top 50,000 websites.

Barry Stamp is a member of the Institute of Credit Management’s technical advisory committee which gives feedback to government consultation documents.

For further press information please contact: Richard Goedegebuur at checkmyfile.com on 0207 193 6021 or email: richard.goedegebuur@checkmyfile.com
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Credit Reporting Agency Limited – Registered Office 13 High Cross Truro Cornwall TR1 2AJ
Registered in England no 3719598