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Credit card rates soar despite base rate

admin — Mon, 07 Feb 2011 23:08:05 +0000

For nearly two years the base interest rate in the UK has stood at just 0.5 percent, which is the lowest level it has ever been at in the history of the Bank of England, which spans over three centuries. However, throughout the period over which the base rate was falling credit card interest rates continued to increase.

At present the base rate still stands at 0.5 percent. However, despite this credit card interest rates have continued to soar, with the average credit card interest rate now coming in at a whopping 18.9 percent. This is thirty five times higher than the Bank of England base rate and is the highest it has been in thirteen years. Some officials believe that this stems from providers being cautious due to the increased risk of bad debt because of job losses and the state of the economy.

Credit card providers that are offering lower rate deals are becoming increasingly cautious over who they offer these deals to, which means that the majority of consumers have reduced choice when it comes to finding a credit card. This means that many end up having to go for the higher rate cards, and with interest rates going up and up this can equate to a huge amount of debt and interest.

One official said: “During the financial crisis many credit card companies assessed their existing customer base and many customers have seen large increases in the rate they are charged. Customers who would previously have switched to another provider are now finding it’s not so easy to do so. Competitive deals for balance transfers and introductory purchases remain on offer but card providers are selective over exactly who they select for these deals.”

Tags: bank of england, Rates (tax), credit card, level, debt, customer base

Credit card rates soar despite base rate is a post from: Credit Cards Bureau

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Credit Card Rates Hiked By Two Major Providers

admin — Tue, 29 Sep 2009 07:50:39 +0000

Two major credit card providers have become the latest to hike up their credit card interest rates, despite the fact that the base interest rate in the UK is at its lowest level in the three hundred and fifteen year history of the Bank of England. Officials claim that the two card providers have sneakily hiked up the interest being charged on credit card borrowing by significant levels, thus increasing borrowing costs for their cardholders.

The two banks that are said to have pushed up their credit card interest rates recently are Halifax and Bank of Scotland. Officials have expressed concern that whilst the Bank of England has been slashing the base interest rate over the past six months, bringing it down to an all time low of just 0.5 percent, some credit card firms have continued to hike up their interest rates dramatically.

The two groups are owned by HBOS, which has now been taken over by Lloyds TSB. The provider has said that the rate rises are between 1 and 4 percent. However, some of the credit card customers have received letters stating that their card interest rate is being increased by 5 percent. Some customers have even seen their rates increased by more than this amount. The card provider has said, however, that the move is part of a ‘continual review of rates’.

An official from HBOS said: “The changes will affect a small number of our card holders and will be according to each customer’s personal circumstances. The average increase is between 1% and 4% which is inside [government] guidelines and reflects what is happening across the credit card market.”

Tags: bank of england, increases, credit card, providers, halifax, bank of scotland, Lloyds TSB, borrowing

Credit Card Rates Hiked By Two Major Providers is a post from: Credit Cards Bureau

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Credit Cards Costing More

admin — Mon, 15 Dec 2008 19:27:47 +0000

Credit Card companies are going against government warnings to make their credit card deals fairer to customers and face investigations by industry watchdogs if do not change their ways.

Despite there being three interest rate cuts to the Bank of England base rate, following an analysis carried out by the Independant, it looks like people are now paying more now than what they would have 12 months ago with interest rates now at 17.7% compared with 16.6%.

Lord Mandelson has given providers two weeks to help their customers with ways of managing their debts which was a topic discussed at a summit back in November. By Thursday the government is expecting providers to come back to them with how they intend to go about this and failure to do so may end in further investigation by the Office of Fair Trading.

Lib Dems Treasury Spokesman Vince Cable said “The Government has got to get tough with credit card companies determined to make a quick buck out the millions of people struggling to make ends meet. Tough words are worthless unless they are backed up with real action.”

On the Conservative side, business spokesman Alan Duncan said “The Government’s policy after the banks’ bailout has clearly not reached the credit card sector. It has done nothing to clamp down on credit card ownership – particularly by the most vulnerable people.”

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Tags: Conservative side, office of fair trading, interest rate, credit card, bank of england, store cards

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Lenders Raising Costs

admin — Sun, 23 Nov 2008 14:07:15 +0000

Over the last three months the cost of credit card borrowing has gone up considerably with new figures showing that more than 10% of credit card providers are raising their rates. Sixteen credit card providers have put up the interest rates on purchases since August and all this has happened not taking into account the drops of Bank of England base rate. All this information has been put togeather by financial information group Moneyfacts.

Along with this another twelve cards have put up the interest on cash advances sometimes being an additional 5% interest added onto what is already an expensive way of getting cash.

11 balance transfer cards are also being changed by some providers where the transfer fee has gone up or there has been a reduction in the amount of time you have the 0% balance transfer period for.

Moneyfacts have noticed that in the last three months the average interest rate has risen from 16.8% to 17.2%. Analyst for the group, Michelle Slade says “During the past year, card companies have continued to increase the charges on their cards and consumers will find they will be stung more severely than ever before.”

“Just like on mortgages, card companies are factoring in a much bigger margin for the risk of consumers defaulting, so rates are going up rather than down.”

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Tags: moneyfacts, bank of england, Credit Cards, purchases, 0% balance transfer

Lenders Raising Costs is a post from: Credit Cards Bureau

Credit card rates soar despite base rate For nearly two years the base interest rate in the...

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