National Disgrace?

[admin]

See this article from emoneyfacts.....

Credit card costs increase
Figures from Moneyfacts have revealed that the average credit card purchase rate has increased markedly in recent times. In the last two years the figure has grown from 16.3% to 18.1%. Over the last 12 months alone, twelve cards have increased rates, including cards from American Express, Bank of Scotland, Capital One Bank and Nationwide BS. "The increase come from a combination of card providers raising rates, withdrawing competitive deals and the launch of new cards onto the market with higher APRs than we previously may have seen," commented Michelle Slade, analyst at Moneyfacts.co.uk. "Customers who repay just the minimum will be hardest hit with an additional £408 in interest now being payable on a modest balance of £2,000."
04 Jun 2009

[admin]

Do you think it is a national disgrace that lenders have seen fit to increase credit card rates even though the bank rate is at a 400 year low? Do you think this is pure exploitation?

Perhaps cherry could orchestrate a national campaign urging the public to complain to their local MP (whoever that is this week!!!)

[admin]

Also see this......

Credit card rate racket

Credit card interest rates have reached an average of more than 18 per cent - the highest level on record. The punishing tariff flies in the face of the Bank of England base rate which was maintained at an historic low yesterday. Card providers have hiked charges in an attempt to cover for the growing number of customers who cannot clear their debts. The problem is likely to worsen during the recession as unemployment soars and homes are repossessed. Michelle Slade, an analyst at Moneyfacts, said: 'Rising unemployment means that the risk of customers defaulting on their card repayments has increased, which is being passed on through higher rates. 'If customers are struggling with repayments, unsecured lending is one of the first casualties as customers fight to keep hold of their property."
Source : Daily Mail page 30 - 5.6.09.

[admin]

and see this from the Telegraph...

Interest rates: credit card rates rise despite low Bank Rate
The Bank of England may have kept Bank Rate on hold at 0.5pc but credit card rates continue to rise.

Published: 2:15PM BST 04 Jun 2009

The average credit card purchase rate continues to increase and stands 18.1pc compared to 16.3pc two years ago.

In the past six months, twelve cards have increased rates including cards from American Express, Bank of Scotland, Capital One Bank, Halifax and Nationwide BS.


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Third of internet users too scared to use credit card to shop online Moneyfacts. co.uk, said that the increase comes from a combination of card providers raising rates, withdrawing competitive deals and the launch of new cards onto the market with higher APRs than we previously may have seen.

Michelle Slade, analyst at moneyfacts.co.uk , said: "Customers who repay just the minimum will be hardest hit with an additional £408 in interest now being payable on a modest balance of £2,000. With only a handful of cards on the market linked to tracking base rate, very few have seen any benefit from the current all time low base rate.

"Rising unemployment means that the risk of customers defaulting on their card repayments has increased, which is being passed on through higher rates. If customers are struggling with repayments, unsecured lending is one of first casualties as customers fight to keep hold of their property."

The analyst added that competitive credit card deals can still be found on the market, with 0pc balance transfer deals available for 16 months and 0pc introductory purchase deals for 12 months, but with the increased risk of default, only those with exemplary credit histories are likely to be accepted for the best deals.

[admin]

Comments from the cherry forum...

Post - ''Lion, you are very much on the ball with that last post.

Debt collection agencies are putting accounts "on hold" on a regular basis as they do not have copies of the agreements and some are closing accounts as soon as a copy of the agreement is requested and returning the file to the original lender.

I have come across people who have had offers of new cards, under new agreements, at slightly lower rates than their current cards. I think there is a good likely hood that his is due to the lender knowing they do not have the original agreement.

As for balance transfers, this does not help the lender if the card that debt is tranfered to was taken out before April 6th 2007.

I believe it is the case that a lot of the card providers do not have the original agreements and they are trying to put every possible obstacle in the way of requestes for them.

The result of the situation these lenders have put themselves in through mismanegment and a lack of respect for their legal obligations is costing them dearly and unfortunately we know where they will recouperate their losses from!''

Post - ''I couldnt agree more. The credit card companies are a disgrace & the rates they charge are obscene in the current climate.''

[admin]

Another comment from the cherry forum...

Post - ''I could not agree more with Rotherham Owl. Clearly the credit card companies are trying to do damage limitation. I wonder if any of the negative press of the unenforceable credit industry is anything to do with them. I refer to the recent spot on breakfast telly telling everyone to be cautious when entering an agreement with a MOJ claims company.''

[John00]

We actually do not need a credit card. It does no good to us rather adds to our troubles. We end up paying huge amounts as interests. Failing to pay the monthly payments in time lowers our credit score and decreases our creditworthiness.
No, credit cards are not indispensable. A credit card is a source of money. It comes with a credit amount compatible to your monthly income. You can make purchases and take care of your expenses using the credit and payoff the money at a certain interest rate at the end of every month. Do not carry too many credit cards. Try to maintain a good credit score that tells your creditworthiness. With a credit card in hand, you tend to make undue use of money that does no good but only keeps you indebted. There is one way in which a debit card scores over a credit card. It offers a limit and the user is bound to use the money within the limits of money in his account unlike with credit cards.
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