Variable interest rate on credit card

Adrasteia01

Hi,

I'm with Ulster Bank in the Republic of Ireland and have had a card with them for about 7 yrs. Anyway, basically they put up their APR on all standard credit cards about 6 months ago. I received my latest statement today and they say they are reducing their interest rates (which sounds good), but it says the new rates will be variable. What does that mean? Does that mean they can increase it to whatever suits them whenever they want? It makes me wonder what the conditions would be for that to happen.

Anyway, this is what the notice said on my statement:

Variation of Interest Rate Notice
With effect from 1/9/07, the monthly rate for purchases and balance transfers will decrease to 1.284% (variable). (Annual rate is 15.408% and APR is 16.5% variable). The monthly rate for cash advances will decrease to 1.454% (variable). (Annual rate is 17.448% and APR is 20.7% (variable)).

They've basically dropped a few percent off their APR but it's variable. I'm not sure if they're always variable or if it's just a new policy, but it sounds like it could be a means of extracting more money from customers. Am I right, or am I paranoid?

Tamara

simongregson

Credit card interest rates are usually variable, just be thankful yours have been adjusted downwards!

Adrasteia01

Thanks. That's cool then. They were getting far too expensive.

SantaX

Yes, it can be adjusted downwards! Just ask for it!