'Inertia' Interest Rate Rises - New Card Scam?

SarahNeedle1872

MacBoy wrote: »

Sarahneedle1872- yes, this is exactly why I have termed it an 'inertia' scam. Do nothing? You get screwed.

Always wondered what 'inertia' meant!:D

There's no such thing as 'free banking'. If u don't pay a fee, u usually loose out by getting a rubbish interest rate on savings, or a high interest rate on borrowing. Free banking is a myth

Sarah x

tom188

Quote:
Originally Posted by MacBoy
in EXACTLY the same way as our 'free banking' is actually being paid for by customers incurring illegal bank charges.


Are you sure bank charges are illegal?

They are not illegal they are (potentially) unlawful. When will people get the terminology right?

tom188

Banks used to make their profits from bank charges, now they are refunding these so need new revenue streams - interest rate rises being one of them.

"Market conditions" include ever increasing bad debt, if people are less likely to pay back money they owe then banks need to increase the covenant on what they are lending, by charging more up front before a default occurs.

MacBoy

They are not illegal they are (potentially) unlawful. When will people get the terminology right?

Tom188

I prostate myself before your feet and beg for your forgiveness - Jeez why is this forum seemingly full of such condescending people?

Early impressions are that they're a much friendlier lot over at CAG... pity because this is such a great forum.

MacBoy

I think people may be right when they say that there's no such thing as free banking - I say may, because the banks already make enormous spreads on the money that we leave languishing and churning through current accounts with them (although I'm sure tom188 will lead the charge to defend them by saying that this is simply not enough!).

Whatever, the way that they fund 'free' banking is most definitely through the unlawful (there! I got it right!), punitive and discriminatory application of penalties to those least able to defend themselves.

Now it seem that it's happening with credit cards too. Hence me trying to draw attention to it. However it appears that there are some here who would prefer that wasn't done. To paraphrase Al Gore, 'an uncomfortable truth', perhaps?

jamalfatty

I make no secret of the fact I work for one of the banks in this area, but before anyone shoots me down in flames for just spewing the corporate line, it may be worth pointing out that most if not all credit cards are variable rate and if you werent aware of this when you opened it then more fool you if they do put rates up.

I do think that the level APR's are creeping up to is verging on the ridiculous and I have 2 cards myself with APR's northwards of 20% but I cant complain about it as that is what I signed up to. And as is often the case, if you dont like a particular service, vote with your feet.

Someone mentioned that they are targeting those who they will profit the most from (min payers / balance rollers / high cash usage etc), of course they are - they are a business with shareholders so will do anything to maximise profits. Is may be questionable but is still legal.

wyebird

I wonder if it will cause more defaults in the long run, with people saying it's becoming so unaffordable so s*d it, if they are not able to do anything else about it!

thesaint

MacBoy wrote: »

Tom188

I prostate myself before your feet and beg for your forgiveness - Jeez why is this forum seemingly full of such condescending people?

Early impressions are that they're a much friendlier lot over at CAG... pity because this is such a great forum.

Missing you already. :wave:

Time2Go_25

MacBoy wrote: »

Whatever, the way that they fund 'free' banking is most definitely through the unlawful (there! I got it right!), punitive and discriminatory application of penalties to those least able to defend themselves.

I doubt bank accounts are funded totally by bank charges, most banks make very little money for bank accounts at all. As far as them being unlawful that remains to be seen as it's not been tested yet.

It will be interesting to see how the banking model evolves following the OFT investigation, I'm sure there will be changes in the way our accounts to delivered and charged for, I'm also sure that the majority of people will end up losing out.

As can be seen in the CC market now having been forced to drastically reduce their penalty charges. 0% rates disappearning, bigger and bigger charges for BTs, increasing interest rates and much harder to get out of the penalty charges should you make a mistake.

One thing is for certain, whatever happens they will re-coup their money one way or another, it may be different peple paying charges but it will make no difference to their profit margins.

MacBoy

Is may be questionable but is still legal

We'll see...