Lenders To Ignore The Drop
November 10, 2008
While millions of home owners will be benefiting from the recent 1.5% rate cut, credit card holders look unlikely to expect there repayments to fall. According to financial data firm Moneyfacts although the Bank of England have dropped interest rates to 3% they can expect to pay the average APR% which is around 5 times that figure.
Spokes woman for Moneyfacts, Michelle Slade said “I doubt we will see lenders cutting rates on credit cards, usually lenders only cut rates to attract customers.”
She advises that the only lender to offer cards linked to the base rate is the Co-operative Bank which will see holders of Gold and Platinum credit cards gaining from a 1.5% interest rate drop although with the Gold card having a £120.00 annual fee the interest rate will be around 19.4%.
Mortgages that the Co-operative Bank offered via Northern Rock and Yorkshire Building Society the cut passed on.
On the other hand the largest credit card provider, Barclaycard, has advised that it would not be be changing their interest rate (14.9%) due to the recent drops and a spokesman says “The primary factor in our pricing is risk, not the cost of money, so the cut will not have an immediate effect.”
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