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Credit card applicants may not be able to pay their bills
01 July 2008
Credit card lenders risk losing money by not checking the financial status of people applying for credit cards claims a debt consultancy firm.
Research by uSwitch.com revealed that in the last year 84 per cent of people given a credit card were not asked to provide proof of income by the lender which could lead to credit card companies losing millions of pounds.
James Falla, managing director of Thomas Charles, said: "Credit card lenders are going to give people credit facilities which ultimately they may then struggle to repay."
Due to the credit crunch, consumers are now likely to apply for a new credit card in order to pay off money owed leading to a vicious cycle of debt.
"They've got to the point where they can't afford to pay monthly bills and so the first thing they do is apply for a new credit card," said Mr Falla.
According to uSwitch.com, five per cent of successful credit card applicants said they lied about their salary.
