Why are we all still paying 16%+ interest ??

Kev64

The way interest rates generally have plummetted recently, I would like to know why are we all still paying such high rates on our credit cards. Why is this ?

furndire

Probably because they know people can't borrow any other way. And, if you're already paying interest (and keep spending on card) on a credit card they've got you by the bits.
A bit like an infamous high street store who are charging nearly 30% interest with no credit checks.

On a similar line did anyone see Watchdog, where Provident have now got a credit card - they come and collect at your door every week - absolutely scandelously high rate of interest.

Bismarck

Kev64 wrote: »

The way interest rates generally have plummetted recently, I would like to know why are we all still paying such high rates on our credit cards. Why is this ?

if you have to pay it's because you've got no choice and they don't care. if they've got you by the bits, they'll squeeze you til you squeal.

_Andy_

Kev64 wrote: »

The way interest rates generally have plummetted recently, I would like to know why are we all still paying such high rates on our credit cards. Why is this ?

Because the lenders want to make profit.

Inactive

Because they can.

Simple solution, pay off your balance each month...no interest charged.;)

Kev64

Yes, I can see how it's in their ..err.. interest to keep the rates high, but why are they lowering mortgate rates then ? If it's just down to greed, why don't they take advantage of the difference between the base rate and their mortgage rates ?

furndire

If the mortgage companies start doing this, people will not be able to afford mortgages, so more will default and they will get nothing. In the long term, as amounts are so large, its not in their long term interest. After all they are making money for years.
You need somewhere to live, you don't need to buy that new TV etc, so priorties are different.

NickX

A couple of weeks back it was reported that the Business Secretary, Lord "Mandy" Mandelson was going to have a word with the Card Providers about this. Doesn't seem to have made much difference :rolleyes:

jonesMUFCforever

Why does OP think there is any connection between base rate and credit card rates?
You pay for the infrastructure such as low life of balance transfer rates, nil rate balance transfer rates, people who don't pay or don't pay enough and go into arrears.

The solution as always is never rely on these cards and only borrow what you can comfortably afford.
If you do not clear the card at least once in a 6 month cycle IMO you are on a slippery slope. Posters will always blame the card issuers for 'letting' them spend or 'increasing' their limits without asking but at the end of the day we all have to be responsible for our own actions.

madhusudhan

Because the card companies are not regulated!

I have been struggling to pay up payments as they (MBNA in particular) have increased my rats from 0% to 35% ridiculously.

I have submitted an online petition to PM, contacted Mandy, other MPs to raise my point. You can sign the petition here if you wish to join the fight club:

http://petitions.number10.gov.uk/unfaircards/


I have started a campaign to make people (like me) aware of the consequences of these sharks:

http://unfaricards.blogspot.com

Thanks
Madhu

johnllew

Kev64 wrote: »

I would like to know why are we all still paying such high rates on our credit cards.

We aren't all paying high rates of interest - a large percentage of us pay off our credit cards in full every month so the interest rate is irrelevant.