Credit Card interest rate

emperormessia

So today I receive email from Asda Credit Card and two other lenders saying my interest rate will be going up because of Bank of England interest rate increases I have been receiving similar emails every couple of months and because of that one of my favourite card went from 27 apr to near 31apr. it not that it matters as I have the rule pay in full but it had me thinking, Will Credit card interest rate ever come down? Can I just call and negotiate the apr 

I would love your thoughts 

MorningcoffeeIV

They sometimes come down.

You can ask if they'll lower it - you may be on their 'save' list. However, it's unlikely, given the upward pressure on costs.

th081

How else would banks make bumper profits. Pay savers 1%, charge borrowers 25%

emperormessia

MorningcoffeeIV said:

They sometimes come down.

You can ask if they'll lower it - you may be on their 'save' list. However, it's unlikely, given the upward pressure on costs.

Oh thanks 

grumbler

th081 said:

How else would banks make bumper profits. Pay savers 1%, charge borrowers 25%

Well, we lend our money to banks without any risks (up to certain limits).
For banks  unsecured CC lending is possibly the most risky lending and the interest reflects this. It's financial law - the higher the risk, the higher the interst. Plus nonsensical Section 75 on top of other risks.

th081

grumbler said:

th081 said:

How else would banks make bumper profits. Pay savers 1%, charge borrowers 25%

Well, we lend our money to banks without any risks (up to the certain limits).
For banks  unsecured CC lending is possibly the most risky lending and the interest reflects this. It's financial law - the higher the risk, the higher the interst. Plus nonsensical Section 75 on top of other risks.

I think the amount they charge is what the market will bear and does not necessarily correlate with risk - they are making bumper profits with the spread. 

It will be interesting to see in a few years what the overdraft usage in the UK is and has it fallen given most rates are 40%. I think bank revenue from overdrafts will have fallen a lot with only the most desperate using it. The change has IMO been good in that it forced a lot of people to pay back the OD. Maybe the FCA should come up with something similar for CC