Belfast Telegraph

Credit card firms focus on existing customers

The number of credit cards that are restricted to existing customers has soared nearly five-fold during the past three years, research indicated today.

There are currently 45 credit cards on the market that are only available to lenders' existing customers, with many of these restricted to people who hold their current account with the group, according to market analyst Defaqto.

The current number of restricted cards represents a huge increase from the eight cards that were only available to existing customers in September 2007.

Defaqto said the number increased only slightly during 2008 to nine, before more than doubling to 22 in September 2009.

One of the factors behind the 462% surge in credit cards that are only available to existing customers is the tighter lending criteria providers are now employing.

By restricting lending to their existing customers, they have a better idea of their financial status, particularly if they hold their current account with them.

Kevin Bray, insight analyst for banking at Defaqto, said: "It seems that credit card lenders are increasingly focusing their marketing upon their existing customers.

"For instance, it is no longer unusual to see credit cards restricted to a provider's current account customers, and some of these are differentiated from their generally available cards by offering a preferential deal, such as a longer 0% introductory offer.

"The most attractive deals are generally the preserve of those with the best credit ratings and as a consumer's credit status deteriorates it is becoming increasingly difficult to get a credit card."

Belfast Telegraph