An MHK has ‘massive concerns’ for the limited credit card offering in the island.

It comes after an error by Barclays bank, which announced last week it would be withdrawing its credit card services from the Isle of Man.

It said its island-based customers would see their credit cards stop working on May 30, with their accounts closing in June.

Just hours later, the bank emailed its customers saying it had made a mistake. However, since Barclaycard sits within its UK ring-fenced bank, and its products are designed for UK residents, anyone applying for a new Barclaycard must have a permanent UK address.

Jason Moorhouse says that despite the swift response by Barclays, there was a ‘surprising level’ of concern. The Arbory, Castletown and Malew MHK received 20 emails, phone calls and Facebook messages following the initial announcement.

He said: ‘Barclaycard’s response was fast and did provide some reassurance.

‘However, a key concern was not retracted and that was the fact that no new applications will be considered by Barclaycard from island residents.

‘This is a massive concern and I will raise this again in Tynwald.

‘The issue here is that repeated ministers and the Financial Services Authority have dismissed the issue as being one relating to corporate choice.’

He said that the reality of the cause is ringfencing, meaning to operate outside the UK system ‘is now seen as unattractive for most UK financial institutions’.

Mr Moorhouse added that a lack of a consumer credit act is also to blame, which means that collecting debt from some users is a ‘costly and complicated’ process.

He continued: ‘Unfortunately, the impact is on everybody who wants access to a credit card, as the options available are reduced and the challenge of getting a new card increases.’

Mr Moorhouse asked a question in the House of Keys on November 8, 2022, on local applications for credit cards.

Lawrie Hooper, who was enterprise minister at the time, said in the sitting: ‘Following dialogue led by Finance Isle of Man, a leading provider of credit cards to Isle of Man residents has indicated that over 80% of credit card applications from residents are approved, and that this is in line with approval rates across the Crown Dependencies.’

Mr Moorhouse feels three issues remain, the first being that choice is limited.

The second is that ‘about one in five applications will fail’ and the third is those who succeed are usually provided with a much lower credit limit than what they expected and previously had. He said: ‘In challenging economic times a credit card can provide a local resident and business with increased flexibility, it is concerning that the offering here is becoming increasingly limited.’

Barclays apologised to Isle of Man customers on Wednesday for the mishap.

A spokesperson added: ‘We can confirm all existing cardholders resident on the Isle of Man will continue to be supported and there will be no change to the service they currently receive.’

tesco

This follows Amex, Lloyds and Tesco all withdrawing their charge or credit cards from islanders in the past year.

Mr Hooper explained in the November House of Keys sitting that it is a ‘very complicated situation’.

‘Some banking groups have made commercial decisions, perhaps prompted by Brexit, to concentrate on their core UK market and are therefore only providing new credit card services to UK residents,’ he said.

‘However, the department is aware that a number of banking groups with a presence in the Isle of Man continue to either service existing or offer new cards to Isle of Man residents.

‘The provision of credit card services to local residents is ultimately a commercial decision for providers based on a range of factors.

The choice of providers has been of concern to varying degrees over recent years.

‘The Isle of Man Financial Services Authority also continues to monitor the availability of credit to residents from banks licensed in the Isle of Man. This includes the availability of credit cards from those banks’ wider groups.’

He added the department was trying to ‘influence’ credit card providers to ‘consider servicing the island once again’.