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Is the UK credit card market anti-competitive?

As we continue to see the credit card market heavily criticised in the financial press for maintaining high rates as base rates continue to fall there is a concern that the historic competitive element of the UK credit card market has reduced of late. We have seen a number of major UK credit card companies either withdraw from the market completely or run down their operations and reduce the number of "risky" customers.



As the government joins the chorus calling for lower interest rates on credit cards in UK there are concerns about a lack of commitment to reducing costs at a time when UK credit card debt has never been higher. This is a very difficult situation because the credit card companies are seeing their default levels increase substantially as more and more UK customers are feeling serious financial turbulence. Whether we need to see a shakeout of the more indebted customers in order to allow the industry to bottom out and start again or increase help for struggling consumers is the main argument.



It will be interesting to see exactly what the UK government has to say as they struggled to force many of the leading UK banks to reduce their mortgage rate. Will the credit card companies roll over?

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