July 10, 2006

By Julie Ann Amos

The colossal credit card industry of the UK touched a historic milestone last month, having completed 40 glorious years of its advent in the country.

Four decades back, it was in the last week of June that the Barclaycard was launched from a converted shoe warehouse in Northampton. Facing enormous initial resistance, it was only in 1970 that the laws were somewhat liberalized allowing cards to offer extended credit. The first competition that the Barclaycard received was in 1972 from the Access card.

From the stern start-up wave of non-acceptance to the dynamic user-driven scenario it is in today, the UK credit card industry has indeed come a long way.

Here we take a bird’s eye view of the hopes raised and dashed, consumers alerted and agencies warned; and all else that ruffled the feathers of this huge industrial sector of the UK in the month of June, 06.

The credit card cheques continued to be a pitfall for the users, with the majority of Britons still using them without understanding that there are charges and fees that follow. The figures are alarming to the extent that each consumer of this sort ends up paying ₤45 extra for each cheque they write.

For the reader who might not know, a credit card cheque allows the customer to buy goods from suppliers who do not accept credit cards. A normal credit card cheque normally comes with a two percent charge and interest rates of 20 percent or more and hence the risk.

On the other hand, spending is expected to be on a high this year with British sports fans likely to spend almost ₤5 billion this year on sports and fitness. This is being thought to be somewhat inspired by the summer competitions such as the World Cup, Wimbledon and Open Golf Championships. An estimated ₤206 is expected to be spent by the average Briton in the year 2006 on sports, with the major proportion of it being done via the credit card.

Meanwhile, an odd but risk-laden usage pattern of the consumer came to the forefront. As per a report released by My Call Credit, one in every three of the total 75 million credit cards in the UK is no longer active. This implies that millions of people have stopped using a credit or store card without telling their lender.

Continue to Part 2

The Month That Was June 2006 Part 1
The Month That Was June 2006 Part 2
The Month That Was June 2006 Part 3