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Barclaycard customers face higher bills as UK's biggest credit card provider announces it........
Barclaycard customers face higher bills as UK's biggest credit card provider announces it........
This is a duplicate of the Blog Entry made on: 18th November 2015 10:01
This is a duplicate of the Blog Entry made on: 18th November 2015 10:01
......link interest to base rate
Britain’s biggest credit card provider will automatically hike rates for 10.5million customers as soon as the Bank of England base rate rises.Barclaycard has written to all UK customers to spell out that from February, the interest rate they pay will follow the base rate. It means that if base rate rises next year, as economists expect, borrowers will face higher bills. Historically, credit card rates have not closely followed movements in the base rate. Since base rate was slashed to a record low of 0.5 per cent in March 2009, the average credit card rate has continued to climb, increasing from 17.7 per cent to 21.5 per cent, according to data analyst Moneyfacts. Just this month, Bank of England governor Mark Carney signalled that interest rates may not rise until late next year. However, economists at major banks are preparing for a possible hike as early as May. By the end of 2018, the base rate is predicted to have risen to 1.3 per cent.On a typical credit card balance of £2,500, a borrower paying back the monthly minimum of 1 per cent or £100 pays £742 in interest per year. If interest rates rise by 1 per cent, they will pay £45 more, £787. A spokesperson for Barclaycard says: ‘We’re not the first in the industry to be doing this - we’re just doing it in the most open way. 'Five million customers will also see their interest rate on cash withdrawals and purchases reduced as we bring them in line with other customers.’
Banks must give you 60 days’ notice before hiking your rate...........Read more here
Britain’s biggest credit card provider will automatically hike rates for 10.5million customers as soon as the Bank of England base rate rises.Barclaycard has written to all UK customers to spell out that from February, the interest rate they pay will follow the base rate. It means that if base rate rises next year, as economists expect, borrowers will face higher bills. Historically, credit card rates have not closely followed movements in the base rate. Since base rate was slashed to a record low of 0.5 per cent in March 2009, the average credit card rate has continued to climb, increasing from 17.7 per cent to 21.5 per cent, according to data analyst Moneyfacts. Just this month, Bank of England governor Mark Carney signalled that interest rates may not rise until late next year. However, economists at major banks are preparing for a possible hike as early as May. By the end of 2018, the base rate is predicted to have risen to 1.3 per cent.On a typical credit card balance of £2,500, a borrower paying back the monthly minimum of 1 per cent or £100 pays £742 in interest per year. If interest rates rise by 1 per cent, they will pay £45 more, £787. A spokesperson for Barclaycard says: ‘We’re not the first in the industry to be doing this - we’re just doing it in the most open way. 'Five million customers will also see their interest rate on cash withdrawals and purchases reduced as we bring them in line with other customers.’
Banks must give you 60 days’ notice before hiking your rate...........Read more here