Tesco credit card - interest rate hike for minimum payments

Emsie1979

Thanks everyone for your useful replies, as I said in my first post, this hasn't happened with any other cards before or since, so Tesco is obviously happy to lose 'good' (from their point of view) customers. I can understand their logic to some extent, but no warning seems like very bad business to me.

chattychappy - on the one hand you say Tesco is looking to make more money out of me, and on the other hand it's not 'shameful' - I'm sure Tesco will be delighted to are defending their actions! And they have lost me as a customer, which doesn't seem like good business sense to me!

takman

Emsie1979 wrote: »

Thanks everyone for your useful replies, as I said in my first post, this hasn't happened with any other cards before or since, so Tesco is obviously happy to lose 'good' (from their point of view) customers. I can understand their logic to some extent, but no warning seems like very bad business to me.

chattychappy - on the one hand you say Tesco is looking to make more money out of me, and on the other hand it's not 'shameful' - I'm sure Tesco will be delighted to are defending their actions! And they have lost me as a customer, which doesn't seem like good business sense to me!

You may think of it as them loosing a good customer. But they might look it from the point of view a customer with an increasing risk of default has settled in full, which really isn't a bad thing!.

But like I said you did realise you could have refused the increase in interest rate and continued to pay at your current rate?. I hope you have transferred the balance to a 0% interest card and saved some money too!

[Deleted User]

Emsie1979 wrote: »

And they have lost me as a customer, which doesn't seem like good business sense to me!

You need to understand that you are not their only customer. To lose one customer, whilst increasing returns from 100 others, makes excellent business sense.

vacheron

Emsie1979 wrote: »

.....chattychappy - on the one hand you say Tesco is looking to make more money out of me, and on the other hand it's not 'shameful' - I'm sure Tesco will be delighted to are defending their actions! And they have lost me as a customer, which doesn't seem like good business sense to me!

Tesco took a gamble after weighing their interpretation of your perceived risk rating.

On one hand you could believe that the interest rate was hiked up to minimise their risk. On the other hand you could consider the more cynical approach that they thought that as you seemed a higher risk to them, you would also appear a higher risk to other lenders and so you would have no option to remain with them and pay them more money!

In your case hopefully you will be able to move (you certainly seem motivated to), and Tesco will have lost a steady income stream, however many, either due to inability or apathy, will probably do nothing and Tesco can rake in a bit more profit from them instead.

System

It's all minimising risk that the cardholder will default rather than make a few extra percent of interest.

Issuers are like goldilocks - they don't want customers that don't borrow nor those that do but can't afford it as they tend to default or go bankrupt.

vacheron wrote: »

In your case hopefully you will be able to move (you certainly seem motivated to), and Tesco will have lost a steady income stream, however many, either due to inability or apathy, will probably do nothing and Tesco can rake in a bit more profit from them instead.

Dobbibill

Emsie1979 wrote: »

And they have lost me as a customer, which doesn't seem like good business sense to me!

That wouldn't be very savvy of you.

They don't need to lose you as a customer for you to make your point, it will have no impact on them.

A better/more savvy idea would be to keep your Tesco CC and if you need to do a further BT in the future then utilise it when they have an offer.

Many people take it personally when things happen with a company but realistically loyalty doesn't pay, they have no idea who you are. You need to use/benefit from them/their deals that will have a better/more satisfying impact for you.