Credit cards: what issues should MSE be raising with the industry?

Nasqueron

MattMattMattUK said:

zagfles said:

MattMattMattUK said:

Gandalf644 said:

MattMattMattUK said:

On this I would like to a change so that the minimum payment must be high enough to ensure the balance transfer is cleared by the end of the interest free period, so on a one year interest free transfer the minimum payment must be 1/12th of the starting amount every month.

The banks won't want that! They want customers to pay interest by luring them in with the interest free period.

I agree, but there are lots of things the banks do not want that the regulator forces upon them.

And you really think they'll continue offering interest free deals which they make a loss on during the interest free period if they have no opportunity to recover that loss at the end of the term

I do not really care, I think that the system as set out by the regulator should be designed to reduce long term consumer debt. The interest free periods would continue, however the upfront feel would change based on the total overall cost, that should not be difficult to understand. 

All they'd do then is scrap fixed fees and give people a % APR based on their credit file like how you can do BT now with no fee but say a 6% lifetime interest rate which would make people like me less well off

MSE_James

Just a word of thanks from us at MSE Towers for everyone's thoughts in this thread 

Dandytf

ForumUser7 said:

Dandytf said:

Ban Plastic Cards if they haven't already done so.
Increase Min repayments from day 1, Not everyone repays in full each time.
Promote Digital alternatives during Application.

I suppose more metal credit cards on the UK market would always be nice!

Prefer Digital though that Lucrative Apple Card in u.k. could be impeccable.

DonnySaver

During application give an indication of how much credit they are willing to give you on a card. I've applied for 0% cards in the past whereby they've only given 2 or 3 thousand pounds which was no use to me for what I needed to use the card for. You only get to find out how much credit you get after the application...and then it's too late to go back.

Nasqueron

DonnySaver said:

During application give an indication of how much credit they are willing to give you on a card. I've applied for 0% cards in the past whereby they've only given 2 or 3 thousand pounds which was no use to me for what I needed to use the card for. You only get to find out how much credit you get after the application...and then it's too late to go back.

£2-3k may not be useful but it's based on the risk element of what the banks are prepared to offer, if you weren't getting more, it's purely because they don't think your credit profile indicates you could afford it

ZeroSum

MattMattMattUK said:

fergie_ said:

Can you ask them about the increasing 'fees' for 'interest free' balance transfers. Some are around the 5% mark - potentially for less than a year. Are they really just front-loaded interest in another guise?

Effectively yes they are, the fees have increased because overall the cost of borrowing has increased. 

On this I would like to a change so that the minimum payment must be high enough to ensure the balance transfer is cleared by the end of the interest free period, so on a one year interest free transfer the minimum payment must be 1/12th of the starting amount every month.

Nah, that'd be ridiculous for us stoozers.
Maybe have an optional choice of doing that to encourage those in persistent debt to clear it. But it's not in the banks interest nor the financially savvy interest, and I don't see why I should be financially penalised because of others being irresponsible 

DullGreyGuy

DonnySaver said:

During application give an indication of how much credit they are willing to give you on a card. I've applied for 0% cards in the past whereby they've only given 2 or 3 thousand pounds which was no use to me for what I needed to use the card for. You only get to find out how much credit you get after the application...and then it's too late to go back.

Some banks already do, NatWest for example

MattMattMattUK

ZeroSum said:

MattMattMattUK said:

fergie_ said:

Can you ask them about the increasing 'fees' for 'interest free' balance transfers. Some are around the 5% mark - potentially for less than a year. Are they really just front-loaded interest in another guise?

Effectively yes they are, the fees have increased because overall the cost of borrowing has increased. 

On this I would like to a change so that the minimum payment must be high enough to ensure the balance transfer is cleared by the end of the interest free period, so on a one year interest free transfer the minimum payment must be 1/12th of the starting amount every month.

Nah, that'd be ridiculous for us stoozers.
Maybe have an optional choice of doing that to encourage those in persistent debt to clear it. But it's not in the banks interest nor the financially savvy interest, and I don't see why I should be financially penalised because of others being irresponsible 

The regulator is not there to help you with your investments, but it is trying to reduce persistent debt. The fact that you might not be able to "stooze" is an irrelevance. 

ZeroSum

MattMattMattUK said:

ZeroSum said:

MattMattMattUK said:

fergie_ said:

Can you ask them about the increasing 'fees' for 'interest free' balance transfers. Some are around the 5% mark - potentially for less than a year. Are they really just front-loaded interest in another guise?

Effectively yes they are, the fees have increased because overall the cost of borrowing has increased. 

On this I would like to a change so that the minimum payment must be high enough to ensure the balance transfer is cleared by the end of the interest free period, so on a one year interest free transfer the minimum payment must be 1/12th of the starting amount every month.

Nah, that'd be ridiculous for us stoozers.
Maybe have an optional choice of doing that to encourage those in persistent debt to clear it. But it's not in the banks interest nor the financially savvy interest, and I don't see why I should be financially penalised because of others being irresponsible 

The regulator is not there to help you with your investments, but it is trying to reduce persistent debt. The fact that you might not be able to "stooze" is an irrelevance. 

If the regulator did what you're suggesting, I think it would backfire & banks would ultimately just stop offering 0% deals, and everyone is worse off.  There's already things in place to tackle persistent debt