Are All Our Credit Cards At Risk After Egg Dumps 161,000 Customers?

2nd February 2008

The news that Egg the Internet bank owned by Citigroup has told 161,000 customers that their credit cards will cease to operate in 35 days might send shivers through the credit card carrying world. Anyone who uses a credit card regularly might now think that their lives might be changed if their credit card was revoked. So many people will now be thinking that they should reduce their outstanding balance more speedily than they might otherwise. Depending on a credit card is all too easy and if it goes even with seven weeks notice life might be harder and so if debt is reduced before that day then it will not be such a hard blow.

Egg says that the notices were issued after a review of customer profiles. Banks are reviewing their lending criteria in the wake of the seemingly neverending squeeze on credit following the falls after the shaky mortgages in the prime mortgage lending sector.

Citigroup acquired Egg in September 2007 from Prudential.

Undoubtedly anyone with one or more credit cards is going to think twice before incurring any further commitments on their credit card in coming months or perhaps years. The credit party may well be over and with ever rising household bills for energy and transport more folk are going to try and pay off their debts sooner rather than later.

Citizens Advice Bureaux have been advising that debt has been spiralling over the past few years and that a crunch was coming for many more individuals and families. They now appear to proved correct. According to the charity, debt enquiries to CAB offices in England and Wales have increased by 20% in the last year, totalling 1.7 million in 2006/2007.

In February 2007 CAB in Scotland was asking for more volunteers in the face of a 40% increase in debt enquiries.

Drastic solutions might be need and one is to cut up credit cards. It might be hard but a great first step to reducing credit card debt is to cut up the cards - No Cards, No Charges, No Debts. Get out before they put you out. Don't let them contact you to take away the card. Make it easier and do it yourself. Increase your monthly payments or pay lump sums in if you can to reduce interest payments.

And then those Store Cards - ouch!!!!