When Prudential started up the EGG credit card operation it suffered huge losses to buy its way into the business.
Having established a reasonable customer base, they put up their charges and made a profit.
Then they sold it to Citibank who have decided to reduce the number of customers they serve. These include 'unprofitable' customers who pay off their bills in full each month. In some instances these customers have been deemed a 'poor credit risk'.
To the casual onlooker this does seem odd, especially as the bank still makes a turn on the commission retailers pay on their turnover.
Nevertheless one wonders how long it will be before other credit card companies expunge from their customer base prudent cardholders who pay off their debts each month in favour of those customers who maintain, high balances, pay high interest charges and could be potential bad debts.
As one sub prime door closes another one opens?
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