Consumers Should Fight Credit Card Increases
January 12, 2009
Consumers are being urged to bear in mind that hikes on credit card interest can be fought if the credit card company appears to have put up the rate on the card for no apparent reason. Many credit card companies have been increasing both the interest rate and the charges on their credit cards, and this is despite the fact that the base rate has fallen by almost two thirds since the end of last year. This has caused concern amongst campaigners, consumers, and even the Prime Minister, Gordon Brown, who has been trying to address the issue.
Borrowers who find that their credit card providers suddenly increase the interest rate on the card should contact the lender to find out why the rate has been hiked up. If the borrower has a good credit and repayment history there should be no reason why the card company would increase the rate at the current time when the base rate is actually falling, and customers need to ensure that they find out just why the card company has increased the rate, as there is a good chance that the consumer can get the rate reverted back to its original level.
Official from the Financial Ombudsman Service have said that when credit card firms have been unable to justify rate increases they have been forced to reduce the rate back down to its original level. One official from the service said: ‘This is something we are starting to see increasingly more of. What we would want to see is an individual risk assessment of that customer, not some vague statement as to why lending money is more dangerous. Firms are frequently unable to produce this.’
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