Halifax Clarity - interest linked to BoE base rate

Roland_Sausage

I have just had a letter from Halifax saying that the interest rate on my Clarity card is going to be linked to the Bank of England base rate.

My usual interest rate is normally 17.95%. Although it will remain at 17.95% initially, from August this is going to be made up of 17.45% + 0.5% (the BoE base rate).

What this means is that there is now an element of the interest rate that is outside control of Halifax. So even if I am a model customer and give them no cause to think I am a bad risk, etc the rate can still rise based on the whims of the Bank of England.

Is this a change they are making across the board, or something I have been singled out for?

ricky_v

Roland_Sausage wrote: »

What this means is that there is now an element of the interest rate that is outside control of Halifax. So even if I am a model customer and give them no cause to think I am a bad risk, etc the rate can still rise based on the whims of the Bank of England.

They're only doing it because the base rate can only go up (and will probably go up very soon)!:rotfl:

if you have a large outstanding balance every month try to BT onto a card which will always be below the base rate for a period of time (i.e 0%)

[Deleted User]

It was a change they brought in a couple of years back. I'm surprised you've escaped this long.

Roland_Sausage

I pay it off in full every month so it won't be a huge issue for me. The only time I pay interest is the odd time I make a cash withdrawal abroad. Even still it might be annoying if the interest rate shoots up 10%.

guesswho2000

I got the same at the weekend. 21.45% plus BoE base rate. Never mind, I only use it for foreign cash withdrawals anyway, it doesn't carry a balance.

brendon

Deleted_User wrote: »

It was a change they brought in a couple of years back. I'm surprised you've escaped this long.

I've had a card for 12 months, and it's only just been changed. Perhaps it's being rolled out gradually across products. No doubt there will be an interest rate rise by the end of the year anyway.

bigstevex

It's not just clarity cards, I have a normal halifax card and also just received the letter!

cautiousjon

Roland_Sausage wrote: »

...
What this means is that there is now an element of the interest rate that is outside control of Halifax. So even if I am a model customer and give them no cause to think I am a bad risk, etc the rate can still rise based on the whims of the Bank of England.
...

Your risk profile is priced into your 'personal base rate'. I have a great credit record and yet have a 21.45% base rate.

ricky_v wrote: »

They're only doing it because the base rate can only go up (and will probably go up very soon)!:rotfl:
...

Indeed. It's purely so that Halifax can perform a rate hike without seeming too hard on customers. "Your rate rise is the Bank of England's fault, honest!"

PeacefulWaters

It's so they don't have to give two months notice of a rate change.

Cell

And you can't opt out like you could if it was a discretionary increase.

Roland_Sausage

Cell wrote: »

And you can't opt out like you could if it was a discretionary increase.

According to my letter you can actually. However it is too useful for foreign transactions for me to consider this.

EDIT: I see what you mean now. What I meant is you can opt out of being changed to this scheme. After that, there is no opting out.