To owe or not to owe… that is the question
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It’s not a great time to be a banker. But now credit card company Egg is under fire for clamping down on accounts they say carry too much risk.
But are all the accounts being cancelled those which represent bad debt? There has been a dramatic re-pricing of risk (upwards) in light of the subprime crisis and associated fall-out…. but some Egg customers claim they clear their card at the end of every month. This makes no profit for companies such as Egg - the penalties for late payments and high rates of interest incurred on credit card debt are their main source of income.
So watch out in the future - if you’re simply too good with your finances, you might just find yourself being refused credit!
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