By Naomi Kane

ORDINARY people are beginning to feel the squeeze of the global credit crunch as banks get tougher on borrowers.

The number of applicants turned down for a credit card has jumped by 17% to an estimated 3.3 million in the past six months, according to figures released last week by MoneyExpert. Lenders are also tightening up on mortgages, with the number of rejected applications increasing by 60% in the six months to August.

With credit cards, young people aged between 25 and 34 are most likely to be refused. But people who are already struggling with debt could also find it harder to get a new card.

Successful applicants don't have it easy, either. Many are being forced to pay higher interest rates and charges. There have been 125 separate fee and rate increases over the past two months, according to research from Moneyfacts.

American Express, for example, hiked the interest rate on its Platinum Moneyback card from 15.9% to 18.9% at the end of October. Marks & Spencer increased the rate on its &More MasterCard from 17.9% to 18.9%. Card firms have also put up cash withdrawal fees and balance transfer fees.

Esther James, credit card analyst at Moneyfacts, says: "It seems the credit crunch is beginning to cause credit card chaos. With Christmas coming up, incomes will be stretched to the max with more people perhaps turning to their plastic for access to additional cash, only to get stung by still higher rates and fees."

Consumers owed a total of £5.4 billion on credit cards in September, the highest figure in six months, reports Apacs, which represents the plastic card firms. As a result of the credit squeeze, Apacs has adjusted its estimate for the number of rejected applications from one-third at the end of last year to between 40% and 50% this year.

On the house-buying front, more than 738,000 homeloans were turned down by mortgage firms as banks and building societies enforce stricter lending conditions, according to separate research by MoneyExpert. Sean Gardner, chief executive of MoneyExpert, says: "Life is tough at the moment if you're applying for a mortgage. The financial environment is far more stringent than in the summer of last year, and people need to be prepared for rejection."

Lenders are also pulling mortgage deals from the market. Moneyfacts calculates that the number of homeloans has fallen by 40% over the past few months. The biggest drop is in so-called sub-prime loans - mortgages for people with poor credit histories. But there has also been a 16% fall in the number of prime residential deals and a 20% decline in numbers of prime buy-to-let mortgages.

Neil Munroe, of the credit-reference agency Equifax, says: "Credit rejections are increasing, and are hitting credit cards and personal loans as well as mortgages. In the midst of tightening lending criteria, it is likely that things will get bumpy for consumers."