Rate tarts 'could damage credit ratings'
Published On 7 August 2007
People who make use of introductory offers on credit cards and then swap to a new provider could be damaging their credit rating, an industry expert has warned.Many consumers in the UK have been dubbed 'rate tarts' - people who repeatedly take advantage of introductory deals on credit cards and immediately switch to a new card when the offer ends.
However, a leading credit reference agency, Experian, has warned that every time these people apply for a new card, the provider carries out a credit check. A record of too many checks can subsequently lead to a poor credit rating.
James Jones, consumer affairs manager for Experian, explained: "A large number of these searches in a short space of time can ring alarm bell and can therefore affect your credit score.
"It can make it look like you're desperate for credit, or that someone might be using your details in identity fraud."
Mr Jones added that the credit record did not include whether a person was accepted for a card and so contained no reference to how effectively they might be managing their debt.
A recent report from Credit Action suggested that nine per cent of people in the UK have taken out a new credit card to pay off debt on an existing one.
