Can anyone please explian to me why my the interest rates on my credit cards have rocket recently?

This time last year both of my cards where at 11.9% now both are are 20.9% yet the bank of england base rate is now 0.5%.
Luckily I don't have anythinig on the cards but the point is credit card rates have doubled yet banks are being charged less to borrow than every before, and now they are making billions again, is it any wonder?

So is there a banker out there or someone that can explain please, becuase I can not for the life of me figure it out. Unless of course its juts banks doing what banks do best, which is rip off the normal guy and line there pockets. I think many bankers should be jail personally and at the very least never see another bonus again, until all teh debt is wipped out and everyone in teh UK is paided back for all the money they lost due to banks effectively defruading the system to the tune of 100's of billions.

2 words – Banker's bonuses

😉

Higher risk of default means higher margin can be charged.

Have you thought about switching to a card with a low introductory purchase or balance transfer rate?

OP you are not a cynic are you?

What season have we just passed?

How many people have (as the news reported) bought alot of 'cheap' stuff in the sales on their plastic?

Sad really 🙁

Since when did credit card interest rates have anything to do with the Bank of England base rate?

One possible explanation is that the recession means more companies are going bust, which means credit is riskier and more folk are claiming against their credit cards.

At the same time, more folk are becoming insolvent themselves and creating bad debt on their cards.

Credit card rates have no relation to BoE base rates. They are based on risk and return. That's the rate of interest the bank thinks they can get away with charging without customers leaving. It also offsets the risk of people defaulting on the debt.

Credit card companies can charge what they like – there's plenty of competition so people will just move to the card that suits them. I always pay my balance off so just look for the best benefits – I get 1% cashback on mine.

Also, as the BoE base rate is way below inflation it'll be going up soon enough.

Pre-Christmas- you offer great rates
Post-Christmas- you have ROI

dont you play the 0% game?

just shift your cards around at the end of their expiry time to get a new one with 0%

pain in the arse but worth doing.

or have i missed the point?

I don't own any credit cards. Simples.

Are there still 0% deals that don't charge a few % of the balance up front?

I did it once just to see if I could get away with it but felt bad…silly really as credit companies don't deserve sympathy.

I did it once just to see if I could get away with it but felt bad

felt bad for the banks?

😀

I don't own any credit cards. Simples.

I own one (but pay it off in full every month).

For three reasons:

1) having a credit card and paying it off improves your credit rating versus not having one – making it easier to get mortgages etc.

2) protection under the Consumer Credit Act when buying stuff online, which you don't get with debit cards, paypal etc.

3) just in case.

Banks are businesses that sell money. They sell that money at a profit to pay their shareholders (in many cases, now the taxpayer ie: us) and to invest in the future of the business. They're also concerned about survival right now and keen to build up their balance sheets to get them through the near-future which remains very uncertain. They're also under a lot of government pressure to strengthen their balance sheets so they don't need a taxpayer rescue again.

Credit don't come as a favour so we can buy shiny stuff! And interest rates have been historically low for the last decade and they're being held artificially low to help stimulate the economy. They ain't going to go anywhere but up for the forseeable future.

whats a good 0% transfer card at the moment – any suggestions?

felt bad for the banks?

Well, felt I was cheating. Like being a mortgage tart – far prefer just to get a deal that seems fairest for both the lender and borrower which for me meant an offset mortgage paying 0.49% over base rate.

2) protection under the Consumer Credit Act when buying stuff online, which you don't get with debit cards, paypal etc.

More protection than most people think

http://news.bbc.co.uk/1/hi/programmes/working_lunch/7593369.stm

I have one for the same reasons as GrahamS. It gets used quite a lot actually, but always gets paid off, so I really have no idea what the % rates are doing, nor care.

whats a good 0% transfer card at the moment – any suggestions?

Virgin looks good

Tesco.

Credit don't come as a favour so we can buy shiny stuff!

But what rate is fair? If I pay off my card every month then they just get their %age of the purchase price – is that enough for them to want me as a customer? I guess so as I still am one.

Once the BoE interest rates rise, then the sterling will get stronger, so better exchange rates and cheaper imported goods

dont you play the 0% game?

just shift your cards around at the end of their expiry time to get a new one with 0%

pain in the arse but worth doing.

or have i missed the point?

What about the 2.5% (min) balance transfer fee? cheaper than paying interest, but certainly not free.

See these airlines / travel firms going bust? If you've paid by dercit card, the bank will have to refund any moneys due back to you for unused tickets etc. That money has to come from somewhere. In effect, we all pay for that Credit Card insurance.

Its not just credit card companies. Mortgage lenders standard variable rates are increasing at the moment as well, Skipton's has gone up today and others are expected to follow suit. 😯

http://news.bbc.co.uk/1/hi/business/8472664.stm