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Credit Cards - Credit Crunch Affecting Existing Customers Too - 24/03/2008

It has emerged that even those with low value loans and a good credit history are being affected by the global credit crunch.

Many homeowners are struggling to secure new mortgage deals as banks become more discerning over who they lend money to. Before now, lending restrictions were only placed on first time buyers and those with a bad credit history, however now it appears banks are also less willing to lend to the wider market – including those consumers who have a clean record when it comes to credit card and loan repayments.

News reports are released daily from various banks, stating that higher interest rates and lower value loans are now in place for existing customers, as well as those that are new.

Melanie Bien, director at Savills Private Finance said: "The remortgaging market has become tougher because there is simply less money available as a result of the liquidity squeeze. Lenders are choosing to hoard cash rather than lend it to each other which means fewer mortgage deals and those that are available are slowly creeping upwards in price."

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