The Lemon Fool

Just popped onto eBay.

First thing I noticed was an advert.

And I quote - "A credit card for people with poor credit".

Words fail me.

AiY

To be fair they have been around for quite a while. Or are you concerned that they are offering one to you?

Some of them are by very well meaning groups.

There is the old phrase that "there is one born every minute".
That's true, but not all get the same education or financial education.

There was certainly a time that borrowing was simply considered wrong, but now it's a fact of life.

My grandparents paid cash for their house, did you or I? When you pay for a holiday, do you pay cash? Or do you take advantage of the insurance of the consumer credit act?

These sort of credit cards are NOT cheap. However as I understand it they charge because they offer significant support to their target clients.

I'm affluent, however I LOVE the adverts for a certain credit card for those with poor credit history. Hence I looked them up after your post and this is what I found.

Awards Record

2020 – Moneyfacts Consumer Awards – Credit Card App of the Year - WINNER
2020 – Moneyfacts Consumer Awards – Credit Builder Card Provider of the Year - HIGHLY COMMENDED
2018 – Savings Champion Awards – Best Long Term Fixed Rate Bond Provider - WINNER
2018 – Moneyfacts Consumer Awards – Credit Builder Credit Card Provider of the Year - WINNER

I picked them because I like the Ad, but they seem to be OK. Seriously it's all about learning. Without practice can you learn?

FWIW I pay for all my food by credit card. I pay no interest because a direct debit simply takes that from my current account.
I could budget, but as I said, I don't have to for food, Though if I had a credit building card I would expect to pay.

Ps you get REALLY strange adverts if you research stuff for others. You wouldn't believe the adverts I get.
Try doing a search on "The Anarchists cook book" and see what adverts turn up.

AsleepInYorkshire wrote:Just popped onto eBay.

First thing I noticed was an advert.

And I quote - "A credit card for people with poor credit".

Words fail me.

AiY

There are health insurance products for people with poor health.

Does that make you angry, or would unhealthy people being denied access to healthcare make you angrier?

dealtn wrote:

AsleepInYorkshire wrote:Just popped onto eBay.

First thing I noticed was an advert.

And I quote - "A credit card for people with poor credit".

Words fail me.

AiY

There are health insurance products for people with poor health.

Does that make you angry, or would unhealthy people being denied access to healthcare make you angrier?

Does providing health insurance to unhealthy people subsequently make them more likely to be unhealthy?
vs
Does extending credit to those proven incapable of handling credit improve their situation?

Have a think and get back to us

p.s. it's the grumps board so you might find the tone of some posts a bit more extreme for emphasis/self indulgent/ whingy than in most parts

-sd

servodude wrote:

dealtn wrote:

AsleepInYorkshire wrote:Just popped onto eBay.

First thing I noticed was an advert.

And I quote - "A credit card for people with poor credit".

Words fail me.

AiY

There are health insurance products for people with poor health.

Does that make you angry, or would unhealthy people being denied access to healthcare make you angrier?

Does providing health insurance to unhealthy people subsequently make them more likely to be unhealthy?
vs
Does extending credit to those proven incapable of handling credit improve their situation?

Have a think and get back to us

p.s. it's the grumps board so you might find the tone of some posts a bit more extreme for emphasis/self indulgent/ whingy than in most parts

-sd

I'm just saying its not as straightforward as you might think.

Where on the advert for the credit card does it say it only goes to people proven incapable of handling credit such that it won't improve their situation? It would be a an odd business model. There is plenty of history of well managed credit in the communities not traditionally served by banks and other lenders.

I am aware of the board thank you. I took "words fail me" in that context, as quite clearly not literal as "words" were posted!

dealtn wrote:

servodude wrote:

dealtn wrote:
There are health insurance products for people with poor health.

Does that make you angry, or would unhealthy people being denied access to healthcare make you angrier?

Does providing health insurance to unhealthy people subsequently make them more likely to be unhealthy?
vs
Does extending credit to those proven incapable of handling credit improve their situation?

Have a think and get back to us

p.s. it's the grumps board so you might find the tone of some posts a bit more extreme for emphasis/self indulgent/ whingy than in most parts

-sd

I'm just saying its not as straightforward as you might think.

Where on the advert for the credit card does it say it only goes to people proven incapable of handling credit such that it won't improve their situation? It would be a an odd business model. There is plenty of history of well managed credit in the communities not traditionally served by banks and other lenders.

I am aware of the board thank you. I took "words fail me" in that context, as quite clearly not literal as "words" were posted!

How would one obtain poor credit as worded in the advert?
Sounds like an advert for a lender of last resort; I can see why some might disapprove?!
Anyways stay well

-sd

servodude wrote:
How would one obtain poor credit as worded in the advert?
Sounds like an advert for a lender of last resort; I can see why some might disapprove?!
Anyways stay well

-sd

Well I have worked for a provider of such credit, across a spectrum, and with differential pricing, so have a small amount of knowledge. Enough at least to know they aren't a lender of last resort. I suspect you really don't want to be a customer (or employee) of those. That might make it difficult, as you put it, to "stay well".

regards ...

servodude wrote:
Does providing health insurance to unhealthy people subsequently make them more likely to be unhealthy?
vs
Does extending credit to those proven incapable of handling credit improve their situation?

Not being able to pay the Lidl bill is probably quite bad for your health...

If a lender of last resort isn't available the alternative is not to borrow. If they could get by without borrowing a lot of people wouldn't use lenders of last resort. Now there will be irresponsible use and use by people's who lack of financial understanding might make giving them a line of credit tantamount to financial abuse, but they are also a rational choice for many the alternatives being worse such as being unable to afford essentials or borrowing from 'unregulated lenders' who are the actual lender of last resort and who don't abide by niceties' such as bankruptcy...

It's noticeable that you came across this add, on ebay, a place a lot of people go to buy second hand items because they can't afford new ones...

AsleepInYorkshire wrote:Just popped onto eBay.

First thing I noticed was an advert.

And I quote - "A credit card for people with poor credit".

Words fail me.

AiY

Hang on, it may not be that simple. "people with poor credit" could mean several things (including a bad credit history). Mainly, "poor credit" simply means not good credit.

Aeons ago now I applied for and got an Access card (remember?), I didn't even have a 'proper' bank account my current account was with National Giro (remember that?), I had it for quite a long time. Needless to say I am/was a good credit risk. Eventually, Access was closed down (remember?) and I tried to get another credit card - if I remember it was the GM Card from whoever (discounts on GM/Vauxhall cars). I was turned down, I was a bit shocked. "But, but, surely I'm as safe as houses?" I even followed it up with a "Why not?" enquiry - couldn't pass credit check. Now, at this distance, I believe I can see why - not enough credit info available for the auto credit check system. So, despite my being practically a zero credit risk in practice, I was assessed as a "poor credit risk".

Anyway, they followed up my letter by pointing me in the direction of the new and curiously named Goldfish card, which I applied for and got. I now have two credit cars, though only use one at present. The one I don't use has a five figure credit limit on it.

XFool wrote:Hang on, it may not be that simple. "people with poor credit" could mean several things (including a bad credit history). Mainly, "poor credit" simply means not good credit.

That reminds me.

Try being where I was on my return from Italy. Several years abroad, no UK credit history whatsoever recent enough to count. Didn't want credit (at least, anything short of a mortgage), but it was worse than that: I couldn't even get a mobile phone contract without jumping through many hoops (all three of £200 deposit, my dad as guarantor, and a human prepared to override the "computer says no").

Funnily enough, insurers were more enlightened. I had had a car in Italy (in fact, drove it to the UK), and was able to get full no-claims bonus here based on a letter from my Italian insurer. Still some hoops to jump through, but a pleasant contrast to that credit non-history.

Come to think of it, that Italian-registered car got me my flat rental, from an agent enlightened enough to take it as evidence of why I had no credit history nor previous landlord's reference.

UncleEbenezer wrote:

XFool wrote:Hang on, it may not be that simple. "people with poor credit" could mean several things (including a bad credit history). Mainly, "poor credit" simply means not good credit.

That reminds me.

Try being where I was on my return from Italy. Several years abroad, no UK credit history whatsoever recent enough to count. Didn't want credit (at least, anything short of a mortgage), but it was worse than that: I couldn't even get a mobile phone contract without jumping through many hoops (all three of £200 deposit, my dad as guarantor, and a human prepared to override the "computer says no").

Funnily enough, insurers were more enlightened. I had had a car in Italy (in fact, drove it to the UK), and was able to get full no-claims bonus here based on a letter from my Italian insurer. Still some hoops to jump through, but a pleasant contrast to that credit non-history.

Come to think of it, that Italian-registered car got me my flat rental, from an agent enlightened enough to take it as evidence of why I had no credit history nor previous landlord's reference.

So all this new fangled rubbish about 'Credit ratings' etc must be fairly recent. We worked in France 89-98 and had no problem whatsoever getting a mortgage when we came back. I'd always thought of this ' Get a credit card and USE IT to improve your credit rating' guff was from the USA, but it appears to be the case now in the UK as well.

I mean, why?? What's wrong with having a job and contract?

Since the financial crisis, I'm actually more interested in the bank's credit rating. What the hell is the world coming to?

Oh, and the idea of jumping through hoops to get a ******* mobile phone contract is just too funny for words. I'm pretty sure that Vodafone employees would never understand the irony.

Steve

PS Thank goodness this is 'Bitter Lemons'.

stevensfo wrote:So all this new fangled rubbish about 'Credit ratings' etc must be fairly recent.

I can remember my mum telling me tghis stuff what must be 35 years or more ago. About GETTING debt in order to prove one can pay it off and thus gain a good credit rating.

My dad poo-pooed the idea - and I thought it sounded somewhat kafquesque.

I can see some sort of warped logic behind it all - but it still seems warped. As it did 35-40 years ago.

didds wrote:I can see some sort of warped logic behind it all - but it still seems warped. As it did 35-40 years ago.

I suppose it's all about how they don't know you from Adam, but they're still giving you the opportunity to do something stupid with their money if you were that way inclined.

Not a particularly good analogy, but if you were insuring a driver with a fast car, would you prefer one who'd been driving such cars responsibly for the last ten years, or one who (for better or worse) didn't have a driving record at all? Particularly if you were going to have to charge them both pretty much the same premiums, as a normal credit card would?

BJ

didds wrote:

stevensfo wrote:So all this new fangled rubbish about 'Credit ratings' etc must be fairly recent.

I can remember my mum telling me tghis stuff what must be 35 years or more ago. About GETTING debt in order to prove one can pay it off and thus gain a good credit rating.

My dad poo-pooed the idea - and I thought it sounded somewhat kafquesque.

I can see some sort of warped logic behind it all - but it still seems warped. As it did 35-40 years ago.

I see it as 'THEM' running it as a screening tool for marketing purposes ~ a way of of sorting the malleable from the intransigent. The malleable are the 'worked' so they will give up a mobile phone number and other useful info.
A bit like being persuaded to check your credit rating with Experian or similar for a nominal fee.
Call it a "Gullability exercise"

bungeejumper wrote:

didds wrote:I can see some sort of warped logic behind it all - but it still seems warped. As it did 35-40 years ago.

I suppose it's all about how they don't know you from Adam, but they're still giving you the opportunity to do something stupid with their money if you were that way inclined.

Not a particularly good analogy, but if you were insuring a driver with a fast car, would you prefer one who'd been driving such cars responsibly for the last ten years, or one who (for better or worse) didn't have a driving record at all? Particularly if you were going to have to charge them both pretty much the same premiums, as a normal credit card would?

BJ

Yeah, but giving a mortgage to someone with a job and employment history is not quite the same as insuring a plonker for driving a car.

Particularly in the UK, where, unless I'm mistaken, you suffer in your premiums, even if an accident was not your fault. It's hard to believe in 2021 that this is allowed, but apparently it is.

Steve

bungeejumper wrote:

didds wrote:I can see some sort of warped logic behind it all - but it still seems warped. As it did 35-40 years ago.

I suppose it's all about how they don't know you from Adam, but they're still giving you the opportunity to do something stupid with their money if you were that way inclined.

Not a particularly good analogy, but if you were insuring a driver with a fast car, would you prefer one who'd been driving such cars responsibly for the last ten years, or one who (for better or worse) didn't have a driving record at all? Particularly if you were going to have to charge them both pretty much the same premiums, as a normal credit card would?

BJ

It's not that bad an analogy, except that they don't "have to charge pretty much the same premium". And don't.

"A credit card for people with poor credit".

Not all credit card issuers will allow people with poor credit to have a card.

People with poor credit doesn't have to mean poor payment record, It could also mean people with no credit history.

The more debt you have the more points you score on credit ratings the more attractive you are to lend to.

stevensfo wrote:… not quite the same as insuring a plonker for driving a car.

Particularly in the UK, where, unless I'm mistaken, you suffer in your premiums, even if an accident was not your fault. It's hard to believe in 2021 that this is allowed, but apparently it is.

Steve

It’s down to statistics. Apparently, statistically people who have been involved in an accident even if not blameworthy have a higher probability than average of another. Statistics are an accepted basis for insurance quotes as for instance weighting younger drivers despite no accident record.

quelquod wrote:

stevensfo wrote:… not quite the same as insuring a plonker for driving a car.

Particularly in the UK, where, unless I'm mistaken, you suffer in your premiums, even if an accident was not your fault. It's hard to believe in 2021 that this is allowed, but apparently it is.

Steve

It’s down to statistics. Apparently, statistically people who have been involved in an accident even if not blameworthy have a higher probability than average of another. Statistics are an accepted basis for insurance quotes as for instance weighting younger drivers despite no accident record.

Because what the law and the insurance business says about blame is, at best, a hazy approximation to the truth.

Near misses happen all the time: when one driver has a lapse and might cause an accident, others are alert and react to avoid it. With very few exceptions, actual accidents happen when more than one party has a simultaneous lapse in concentration. One may be innocent in law, but has failed to avoid an accident.

Talking to a couple trying to get a 1st mortgage. They didn't have a history of paying bills so we're told to rent somewhere just to prove they could afford it.

Apparently living with mum and having a savings history, employment history and a detailed budget wasn't good enough.

Eventually they got a mortgage with another provider but had to jump through lots of hoops. Detailed questions on lifestyle etc. Apparently how many times you get your haircut can be a deciding factor!

They seem to assume that your lifestyle won't change when you get a house and or children. Do they think all younger buyers are going to keep a party lifestyle, drinking with mates and not pay the bills. Some might but I suspect most will adjust their priorities over time.

Once they got the house they had similar issues with utilities wanting payments sometimes a year up front.

Not a simple situation but I have got debts just to keep a rating, usually a sofa on monthly 0 percent, sad but true.