MSE News: NatWest and RBS ditching introductory bonus rates – but it could...

"NatWest, RBS and Ulster Bank are banning introductory bonus rates to get back to basics with simpler products ..."
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NatWest and RBS ditching introductory bonus rates – but it could make savers worse off, Martin Lewis says

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  • chambtachambta Forumite
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    When was the last time the group had any savings account that offered one? The loss of credit cards with introductory offers changes that market dramatically. Why would anyone take one out now?
  • There we go again. Consumers shooting themselves in the foot by screaming blue murder without knowing what they do.
  • The group says it hasn't offered such rates on its savings accounts and cash Isas "for a long time"

    Hmh. The group seems to suffer from short term memory loss, or has a very funny definition of "a long time".

    The last savings account with a 12 months introductory rate that Natwest offered was their esaver in October 2012. Granted, they only offered it for a few days but long enough for a whole host of MSEers to strike.
  • HerbalusHerbalus Forumite
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    I guess the move could mean a slightly improved rate for those who stay with their bank, as it needn't be so low when there is no relatively high bonus rate to offset, but of course those who switch and are active will lose out from the lack of bonus.

    It also means a lack of surety - a lack of bonuses means no minimum rate and rates will therefore be variable, and subject to easy change (which is normally a lowering).

    Still, it won't affect those who have their savings in current accounts that pay far more than the best savings accounts have done for a long time.
  • "Bank removes bonus rates at a time when it best suits bank profitability to do so".

    "Regulator investigates savings market leading to bank making rate sensitive consumers worse off".

    "Bonus rates scrapped as bank realises they can cut rates with two months notice anyway".
  • arjararjar Forumite
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    I welcome the abandonment of 'teaser' rates, which exploit people's inertia. I hope that the regulator bans them completely. Ditto '0%' credit card rates which encourage unsustainable borrowing and exploit the unwary.

    Now we need a campaign for banning differential charging for new vs existing customers. BT are the worst culprit, exploiting rural customers who have no alternative supplier so cannot access anyone's 'introductory' offers.

    A simplified, better regulated savings and investment system; the rapid withdrawal of taxpayer subsidised cheap money for banks to use instead of competing for savings and the restoration of higher than inflation base rates are essential for the financial health of borrowers as well as savers.
  • HerbalusHerbalus Forumite
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    arjar wrote: »
    I welcome the abandonment of 'teaser' rates, which exploit people's inertia. I hope that the regulator bans them completely. Ditto '0%' credit card rates which encourage unsustainable borrowing and exploit the unwary.

    I disagree with you entirely. By banning 0% on purchases (and I'm ignoring for now those who spend on a 0% credit card while their own money is earning interest), what people do if they want a football season ticket, or a holiday, or another large purchase like furniture? Not all borrowing is unsustainable or exploitative. I don't think a product should be taken away from responsible customers because some people can't handle it.

    By banning 0% on balance transfers, you'd deny a lot of people the chance to pay off the debts quicker and at a lower cost.

    I don't see why you agree with either of the above scenarios.
  • FellwalkerFellwalker Forumite
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    My savings with NatWest have crept inexorably lower over the last two years. The headline grabbing introductory rates at least meant that you had a future period of a fixed income. Now they are free to reduce rates whenever they wish.

    I am wholeheartedly for banning 0% transfers. Borrowing should be paid for.
  • Fellwalker wrote: »

    I am wholeheartedly for banning 0% transfers. Borrowing should be paid for.
    presumably you also want to ban buy now pay later, x months interest free credit, 3 for 2, 2 for 1 ?
    arjar wrote: »
    I welcome the abandonment of 'teaser' rates, which exploit people's inertia. I hope that the regulator bans them completely. Ditto '0%' credit card rates which encourage unsustainable borrowing and exploit the unwary.

    Now we need a campaign for banning differential charging for new vs existing customers. BT are the worst culprit, exploiting rural customers who have no alternative supplier so cannot access anyone's 'introductory' offers.

    A simplified, better regulated savings and investment system; the rapid withdrawal of taxpayer subsidised cheap money for banks to use instead of competing for savings and the restoration of higher than inflation base rates are essential for the financial health of borrowers as well as savers.
    I have several issues with your views: for starters, you appear to be encouraging inertia, instead of asking people to get on top of their finances. It is hardly a chore to make a note of when your interest rate changes. How are all your inertia people coping with variable interest rates, and rates/offers that differ from bank to bank? Are you going to ask next that all banks must offer the same savings accounts and interest rates?

    Next, just because some people have chosen to live in areas that are only serviced by a limited number of suppliers is really no reason that millions of others should be deprived from offers, is it. Do you insist that everybody is to pay the same for their water, electricity, gas, transport, rent, mortgages, loans? Food and clothing next?
  • HerbalusHerbalus Forumite
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    Fellwalker wrote: »
    I am wholeheartedly for banning 0% transfers. Borrowing should be paid for.

    I wonder if you have a credit card at all, because the 56 day or so interest free period seems like borrowing for free to me.

    I don't disagree when a firm charges for borrowing because it is perfectly entitled to do so, and it makes sense: the company is giving you money for a period of time, and so you pay for it.

    However I would object to a firm being denied the possibility to not charge for it if they want to. It seems counter-intuitive to a free market and capitalist society. Other firms are allowed to market loss-leading products, so I don't see why credit card companies shouldn't be allowed to if they are so inclined.

    Plus, 0% transfers have fees, generally around 3%, so the defined period of 'free' borrowing actually does have a cost.
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