Halifax and Bank of Scotland increase credit card rates
In a move which sneaked under the radar of many financial publications it has been revealed that both Halifax and Bank of Scotland have increased the rate of interest charged on their credit cards. However, these two giants of the financial sector are not alone as many state-owned and publicly owned companies have also followed suit. With UK base rates remaining at 0.5% there is dismay at how the government can allow this to happen.
HBOS credit card holders have been receiving correspondence confirming the change in their rates with rises of between 1% and 4% commonplace. However, there have been reports of some customers seeing their credit card interest rate rise to 18.95% from a previous level of 13.9%. With regards to Bank of Scotland the situation is also very difficult for customers with some reporting a jump to 20.95% with cash advances now attracting an interest rate of 26.95%.
It is difficult to understand how rates can increase significantly, with a focus on customer by customer circumstances, when UK base rates remain static at 0.5%. While credit card companies need to protect their income it would appear that increasing the rate charged to more "at risk" customers is counter-productive and will push more and more UK credit card holders into serious financial difficulties. Or are the UK banks looking to clean out their credit card operations and start again?
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