Credit card rates soar despite base rate
February 8, 2011
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.
Tags: credit card, customer base, bank of england, level, Rates (tax)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.”
Millions pay mortgage and rent with credit card
January 8, 2011
It has been revealed in a recent report that millions of people had to turn to their credit cards last year in order to keep on top of repayments on their mortgages or to make rental payments on their rented properties. Around 2.6 million struggling households are thought to have used money from a credit card in order to keep a roof over their heads and pay the rent or mortgage on their properties.
The data comes from Shelter, the housing charity, and the group said that the situation was unsustainable and that households were facing a daily struggle in order to make ends meet and make payments on their properties, whether it was rent or mortgage repayments. The data from Shelter showed that there had been a 2 percent increase in the number of people that had used a credit card to make payments on mortgages and rent last year compared to the previous two years, with 4 percent doing this in 2088 and 2009 but 6 percent doing it in 2010.
However, officials are concerned that not only does this indicate that people are still struggling enormously when it comes to paying for their home, but also that they will end up paying a fortune for borrowing on a credit card in order to pay off another debt.
Tags: eviction, cash, credit card, Mortgage, EconomicsOne finance industry official said: ‘Taking out cash on a credit card should be seen as a last resort. It is an expensive way to borrow. If you need cash, you could look at alternative forms of borrowing such as personal loans, which currently have cheaper rates than the majority of cash rates on credit cards.’
Shelter added: ‘This is a totally unsustainable situation. It is one we fear could see thousands more pushed into the spiral of debt, eviction or repossession and ultimately homelessness. Using credit cards to pay the rent or mortgage is simply robbing Peter to pay Paul. It is the worst possible course of action.’
Be Card Smart Online campaign launched
November 13, 2010
With Christmas now just around the corner a rising number of people will be getting their credit cards at the ready to make a range of purchases online. Shopping online has become extremely popular, and many people use the Internet to do most or all of their Christmas shopping because of the convenience, ease, flexibility, choice, and value for money that is offered.
However, whilst shopping online with your credit card offers all of these benefits it can also result in increased risk of fraud for those that are not careful and vigilant when using their credit cards online. Many people that do not exercise adequate caution when making credit card purchases online become the victims of credit card fraud, and this is something that industry officials are hoping to cut back on this year.
The UK Cards Association has now decided to try and help consumers to be more careful online, and has launched its Be Card Smart Online campaign, which is aimed at helping people to stay safer when using their cards online through the provision of sound advice. Amongst the advice that the UK Cards Association is offer as part of the campaign is for consumers to ensure that they check that website are secure with the padlock symbol, to make sure that their anti-virus software is up to date, and to make sure that they use their browser to access websites rather than linking through an email.
Tags: Many people, Christmas, credit card, corner, common sense advice, convenienceAn official from the UK Cards Association said: “Our Be Card Smart Online campaign has definitely played its part in driving down online fraud losses and we urge anyone planning to shop online this Christmas to remind themselves of our common sense advice.”
Are You Using Your Credit Card For Christmas This Year?
November 30, 2009
Recent research, by moneysupermarket.com, has shown that 66 % of Brits have not saved enough money for Christmas this year. 18 % have saved enough, 34 % are on target to have saved enough and 17 % said they are turning to a credit card, resulting in many getting themselves into debt in order of being able to provide a perfect Christmas for the family. Read more
Tags: debt, zero per cent, credit card, 0% interest, financiallyNew Rewards Card From The AA
November 17, 2009
There is good news for car owners looking for a new credit card as the AA is putting a new reward card into the card market that will ease the “financial pain” drivers face in the current climate. Read more
Tags: interest free, credit card, reward card, financial, cash backJob Cuts at HSBC
November 10, 2009
Banking giant HSBC is to cut 1700 jobs in the U.K. mainly from their collections and credit card operations, which adds to the already gloomy downturn in employment of the financial services industry. Read more
Tags: financia services industry, RBS, HSBC, credit card, LloydsCase Against MasterCard Dropped By European Union
October 22, 2009
An executive arm of the European Union has dropped a case against the credit card giant MasterCard in relation to the transaction fees that the card network levies. The case has been dropped on the condition that the credit card giant cuts its transaction fees, but this has made many retailers angry, as they were looking for these card fees to be scrapped altogether rather than just being reduced. Read more
Tags: visa, transactions, payment, mastercard, fees, retailers, credit cardConsumers Could Benefit From Fee Free Card Transfers
October 13, 2009
At this time of the year, when many people are still battling to repay the credit card debts that they built up over the Christmas and New Year periods, many cardholders decide to look for suitable alternatives to try and cut the amount of interest that they are paying as well as to try and clear their credit card debt quickly. For those that have outstanding balances on high interest credit card, and who are unable to clear the balance in one go, interest payments can end up being very high. Read more
Tags: credit card, 0 percent, balance transfer, interest, cardholders, debt, interest payments, high rateCredit Card Providers To Face Further Clampdown
October 6, 2009
Credit card providers in the UK are set to face a further clampdown as the UK government brings in measures to cut the temptation of further credit card debt for consumers. The government is looking to bring in a number of measures that could decrease the chances of consumers getting themselves even further into debt at a time when the credit card and other debt levels in the UK are already causing concern. Read more
Tags: borrowing, debt, cardholder, consumer affairs, cheques, limit, credit cardCredit Card Rates Hiked By Two Major Providers
September 29, 2009
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. Read more
Tags: halifax, bank of scotland, providers, credit card, interest rate