The end of 0% Credit Cards?

weatherwax_2

http://news.bbc.co.uk/1/hi/business/3969661.stm


'UK credit card firms lose about £1bn a year by offering 0% or low interest transfer rates to poach new customers, says PricewaterhouseCoopers.
The accountancy giant predicts the companies will start to limit such offers, and seek to retain customers by reducing their standard interest rates.

These reductions will only apply to profitable, low-risk clients, it adds.

It warns that some customers are "rate tarts", always moving from firm to firm to seek the introductory offers.


'Perpetual movers'

PricewaterhouseCoopers (PWC) says any reduction in standard interest rates will not be across the board.

Instead it predicts credit card companies will instead only offer lower standard rates to the most profitable customers - those who, although using their cards a great deal, always pay their bills on time and do not represent a credit risk.

"There is a clear danger that issuers are growing a breed of so-called 'rate tarts' who will move perpetually from issuer to issuer to finance their debts at no cost," said Richard Thompson, partner at PWC.'

Dearie, dearie me, how dare we 'finance our debts at no cost' instead of letting the CC companies get away with the ludicrous rates they've been wont to charge us in the past; good grief, the next thing you know WE'LL be charging THEM to lend US money.

vulcanbomber

Heard about this article on the 7am News on Radio 2, Ok Ok no jokes about listening to Sarah Kennedy.

Had to smile to myself and thought about where all these people are getting their information from.......after a split second I remembered.

Well done Martin and every body else that contributes to this board, Money Saving Expert Rocks!!!!!!! : ;D

Reaper

Can't say I'm overly worried. It is only an accountancy firm "predicting" this. I imagaine they have not spoken to any credit card companies and are basing their predictions solely on figures. Credit card companies think more in terms such as "getting market share" rather than bean counting like accountants.

The good times may not last forever, but they won't end just because PWC says so.

pin

The same PwC report is mentioned in the Times as well, but there is no talk about the end of 0% credit cards. The Times talk about credit card companies targetting high risk people:

http://business.timesonline.co.uk/article/0,,8209-1339105,00.html

Doh

the next thing you know WE'LL be charging THEM to lend US money.  ;)  

hehe, we already do ;D Capitalone kindly pay me 1% a year to borrow money for free, okay so only 56days at a time, but its better than nothing 8)

Tr@cker

I think they're more likely to go down the road of charging for BT's-like MBNA-for certain customers, those who shift their money around regularly will be charged.

pin

A follow up to the original BBC story:

http://news.bbc.co.uk/1/hi/business/3971613.stm

Martinslovechild

This sounds like one of those sensationalist headlines, e.g.

1. HOUSE PRICE CRASH IMMINENT
2. TERRORIST SUSPECTS ARRESTED IN SLEEPY ENGLISH VILLAGE
3. 3.5 MILLION PEOPLE TO LOSE JOBS IF KERRY WINS
4. MARTIN LEWIS WINS SURPRISE SEAT IN LOCAL ELECTIONS
5. MAN KILLS HIMSELF AFTER BORROWING £1.2 MILLION ON CREDIT CARDS. WIFE SAYS SHE THOUGHT THE FERRARI WAS LEGITIMATE COMPANY CAR!!!
6. MONEYSAVINGEXPERT LAUNCHES CREDIT CARD OFFERING 0% BALANCE TRANSFERS FOR FIRST 12 YEARS
7. DOG ARRESTED ON TERROR CHARGES
8. THE DODO, THOUGHT EXTINCT, FOUND ALIVE AND WELL IN SKELMERSDALE
9. JOHN KERRY ARRESTED ON TERROR CHARGES ATTEMPTING TO BOARD EASYJET FLIGHT TO AMSTERDAM
10. MAN BUYS HOUSE WITH CREDIT CARD

I might have made some of these up ;D

Shinds

MLC,

Ur so right!

deemy2004

This sounds like one of those sensationalist headlines, e.g.

1. HOUSE PRICE CRASH IMMINENT
2. TERRORIST SUSPECTS ARRESTED IN SLEEPY ENGLISH VILLAGE

10. MAN BUYS HOUSE WITH CREDIT CARD

I might have made some of these up ;D

Sad to say but reality is 10 times worse !

George Bush elected for 4 more years of the same !

As for item 10. hey thats what I intend on doign with the stoozed cash - after Number 1.

deemy2004

http://news.bbc.co.uk/1/hi/business/3969661.stm


'UK credit card firms lose about £1bn a year by offering 0% or low interest transfer rates to poach new customers, says PricewaterhouseCoopers.
The accountancy giant predicts the companies will start to limit such offers, and seek to retain customers by reducing their standard interest rates.

They are publicising the demise of 0% credit cards , i.e. prepping the public for their end ! For if they had kept silent about it then it was not a problem and thus would continue.

Its already started with the charges on Balance transfers creeping into a lot of the card offers, and undoubtly they will try and sneak things into the small print, such as minimum spends.