Earlier this year the UK's Office of Fair Trading had told credit card companies to lower their charges.
In response, the credit card companies have apparently complied - but raised their interest rates to compensate:
http://news.bbc.co.uk/1/hi/business/5379212.stm
Quote:
Financial data firm Moneyfacts said 19 leading credit card issuers have put up their charges.
Earlier this year, the Office of Fair Trading (OFT) told them to halve their typical default fees to £12.
These are the charges users have to pay for failing to meet the minimum monthly payment on their credit card.
The list of credit card companies that have increased some of their charges includes not only American Express and Barclaycard, but also most of the UK's biggest banks, such as the Halifax, HSBC, NatWest and Lloyds TSB, plus a host of other major card issuers.
American Express has raised the rate on one card by 6%, while Barclaycard's Simplicity platinum card customers have seen the rate they have to pay for cash withdrawals go up by 12.1% to 27.9%.
"While it may be argued that the 0.25% increase to base rate in August resulted in some of these increases, with rises of up to 12.1% it is clear other forces are at play," said Moneyfact's Lisa Taylor.
"Rising bad debts and the lost fee revenue has left many providers with no choice but to look for alternative avenues for income.
"And it seems, raising interest rates is a popular option."
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09-26-2006, 07:24 PM
UK credit cards see interest rates rise
