Credit card lenders are to share their credit card data in an effort to stop consumers borrowing too much and getting into financial difficulty.
Barclaycard, the Co-operative Bank, egg and Abbey have all agreed to share data which charts consumers spending habits.
Consumer groups have said lack of detailed data has allowed credit card holders to incur massive debts on different credir cards from various providers.
They are allowed to do this, consumer watchdogs say, because credit card companies do not know which potential customers have massive debts with other providers.
However, under the new system credit card providers will be able to swap 'behaviourial data', which includes how much a customers spends on cards each month, how much is repaid and how much cash is withdrawn, so providers can make "good lending decisions".
"This move will improve our ability to make good lending decisions. Whether it’s a customer applying for a card or asking for an increased credit limit, the better the information we have access to, the better chance we have of getting the decision right," said chief executive at Barclaycard Gary Hoffman.
"Delivering improved data sharing is an important step and we look forward to working with others, as they follow this lead. We now need to ensure that we use the information effectively, to make a real difference and to get decisions right on behalf of our customers and our business," he added.
The new system will be run by Experian, Equifax and Callcredit, who will regulate how the data is handled and will ensure it is not used for marketing purposes.To read more about Credit Card News, click here.
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