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Credit card companies slow to react to base rate fall

While the mortgage companies continue to grab the headlines and the criticism for their slow reaction times in relation to base rate cuts many are now highlighting a problem in the credit card market and the fact that providers are unwilling in many cases to pass on immediate savings. However, UK credit card providers are suggesting that the increased level of unemployment in the UK and potential for a further rise will see more and more customers default on their credit card payments.

We have a chicken and egg situation in that if credit card companies refuse to pass on savings then more customers will fall into financial difficulties although a reduction in interest rates could see this figure reduced. There are major risks to the credit card providers in the UK with debt per member of the population higher than it has ever been before although some experts are suggesting the credit card industry has brought this on itself with recent reckless lending.

For some reason the UK government do not appear to have targeted the credit card market and as such the providers of credit card finance in the UK do not appear to be under any undue pressure.

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