Viewing 27 posts - 1 through 27 (of 27 total)
  • Why are interest rates going up?
  • Premier Icon Dirtynap
    Free Member

    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.

    Premier Icon uplink
    Free Member

    2 words – Banker's bonuses

    😉

    Premier Icon AlasdairMc
    Full Member

    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?

    Premier Icon hora
    Free Member

    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 🙁

    Premier Icon jon1973
    Free Member

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

    Premier Icon GrahamS
    Full Member

    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.

    Premier Icon jonb
    Free Member

    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.

    Premier Icon mudshark
    Free Member

    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.

    Premier Icon hora
    Free Member

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

    Premier Icon monkey_boy
    Free Member

    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?

    Premier Icon hora
    Free Member

    I don't own any credit cards. Simples.

    Premier Icon mudshark
    Free Member

    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.

    Premier Icon uplink
    Free Member

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

    felt bad for the banks?

    😀

    Premier Icon GrahamS
    Full Member

    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.

    Premier Icon brooess
    Free Member

    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.

    Premier Icon jimmy
    Full Member

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

    Premier Icon mudshark
    Free Member

    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.

    Premier Icon uplink
    Free Member

    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

    Premier Icon cp
    Full Member

    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.

    Premier Icon uplink
    Free Member

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

    Virgin looks good

    Premier Icon Daffy
    Full Member

    Tesco.

    Premier Icon mudshark
    Free Member

    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.

    Premier Icon nasher
    Free Member

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

    Premier Icon jon1973
    Free Member

    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.

    Premier Icon druidh
    Free Member

    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.

    Premier Icon bigsi
    Free Member

    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. 😯

Viewing 27 posts - 1 through 27 (of 27 total)

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