Government and many other credit cards fail to do proper income checks

In the current financial climate most industry experts would agree that credit card providers need to ensure that they carry out proper income checks on applicants to ensure that they can afford the repayments on their credit card debt, particularly given the high level of defaults.

The government has been raising the issue about irresponsible lending for some now, slating lenders for failing to carry out proper checks before handing out finance to those on low incomes who cannot afford to repay the debt.

However, it has recently emerged that credit cards offered by a number of political parties, including the Labour government do not carry out income checks, enabling people on relatively low incomes of less than £10,000 per year to get their hands on a credit card.

In fact, according to recent reports people in lower incomes are eligible to apply for two thirds of credit cards, including those made available by the Labour Party and the Liberal Democrats, and this is because the providers have put no minimum wage requirements in place.

More and more people are defaulting on their credit card debts as a result of the strained financial situation that has come about over the past couple of years, and for those with lower incomes the chances of defaulting are much higher.

With the average rate of interest having increase to 18 percent, many people that are unable to repay their credit card debt off in full each month face crippling repayments. A number of industry officials have expressed concern over the lack of minimum wage requirements in place with these credit cards.

The Conservative Party was unable to confirm one way or another whether there were any minimum wage requirements in place with its credit card.