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The Big Story: Brokers offering unsecured credit

Brokers may have qualms about unsecured credit and the banks that provide it, but how do they feel about offering those credit cards themselves?

Video transcript below:

Jemima Codrington, Mortgage Broker News
Jemima Codrington:  Some say it’s an opportunity to widen revenue streams, others say it’s merely irresponsible.  So exactly how beneficial is it for brokers to offer unsecured credit cards?  Hi, I’m Jemima Codrington and welcome to the Big Story on Mortgage Broker News.
 
With the rate of household debt already at abnormally high rates, some are wondering, are offering unsecured credit cards a good thing?
 
Simon Vendryes, Real Mortgage Associates
Simon Vendryes:  Absolutely I think it is.  For clients who don’t have any credit history., how are they going to get, develop credit if they have no security.  It’s that same conundrum right, you have to have good credit, well how do you get good credit?  So it definitely serves a niche in the market.  
 
Marcus Tzaferis, Morcan Direct
Marcus Tzaferis:  I think that if we apply the same principles as you know a successful mortgage broker to selling credit cards, I think that it’s a definite advantage to their business.  I mean I am not with DLC, our brokerage does not provide unsecured credit right now.  But I think that if we are advising our clients, you know in an unbiased manner, I think we are doing a great service to them and I think that the same people that are out there right now helping their clients get into the right mortgage product can definitely be an advantage to them and help them get into the right credit product.  You know if you are not paying your credit card off every month, you don’t need the travel rewards, you need a low interest rate and I don’t know that you know they are getting that level of unbiased advice directly from the banks when they go in.
 
Mike Marini, Dominion Lending Centres
Mike Marini:  I think it helps the industry as a whole to sell unsecured credit cards from a couple of standpoints.  One it creates retention for brokers, the more products we can offer our clients, the more we get to keep and retain our clients.  Banks do this every single day.  But products like the home trust unsecured Visa are prepaid.  So they help our clients build a credit back up when they have blemished credit and ultimately we keep the client long term.