Unemployed? Got no money? Get yourself a credit card.
Most people own at least one credit card. For some people they are a necessity, others use them for one-off occasions, and some people use them and pay off the balance every month. Smug gits.
However, in this new age of ‘responsible lending’ it may surprise you to know that some credit card companies will give you a shiny piece of plastic and arm you with some lovely credit even if you have no job to give you money to pay it back. And we’re pretty sure making minimum repayments is not what the dole was designed for.
A new survey by confused.com compared the credit card market with last years’, and found that there are now 23 credit cards that doleites could potentially obtain, up from 17 last year. Given the Office of National Statistics figures to June 2012 show the number of people unemployed, and long term unemployed, is rising, perhaps the card companies are simply tapping into a new resource of customer.
This premise is supported by the news that, in addition to the no-income cards above, many credit card providers have also reduced the minimum amount of earnings to get a card. The average annual income required is now £9,035 compared with £9,718 in 2011. Assuming the figures do not change, this means you can get credit when you earn so little you don’t even have to pay tax, once the personal allowance goes up to £9,205 in April 2013.
Even platinum aint worth what it used to be. The minimum income required for a platinum credit card has decreased by 36% from an average of £18,425 in 2011 to just £11,838 this year.
Of course, the credit card company deny any impropriety. Craig Jones, spokesman for The UK Cards Association, said: "Card companies use sophisticated credit scoring techniques to ensure that the right cards are given to the right applicants, with appropriate credit limits based on a comprehensive assessment of their ability to pay. Put simply, it wouldn't be in credit card issuers' interests to grant credit to people who can't afford to repay it.” Clearly unemployed-friendly credit cards are only given to those in possession of a generous trust fund or a sizeable investment portfolio then? No?
Nerys Lewis, head of credit cards at Confused.com, said: "As credit card providers make more cards available to more people, we are warning consumers of the dangers of debt as it appears to be increasingly easy to obtain yet more expensive to get rid of.”
But are we moralising beyond our remit? As only over-18s can take out a credit card, shouldn’t we assume that those who choose to sign up for a credit card even if they don’t have a job are responsible enough to know what they are doing? Or will they be the first to blame the availability of credit for their credit crashing personal finance quagmire. Does lending to the unemployed sound like responsible lending, or is it because the banks are too tight, forcing people into more expensive lines of credit? Answers on a postcard...*
* For anyone under the age of 24, this is how you used to have to communicate with and enter competitions on TV programmes before email was invented. Yes, there used to be a time before email.