|
||||||||||||||||
|
End of Interest Free Credit CardsAccording to a new report, the days of UK credit card customers not being charged interest if they repay the full balance of their cards could be coming to an end. Usually, card issuers allow customers who pay their balance in full a period of between 45 and 59 days before interest is levied on their purchases. However, some providers have begun charging interest as soon as a purchase is made, regardless of when payment is received. Worryingly for consumers it looks as though more credit card issuers are set to follow suit. One reason for this change in practice by providers is the need to boost profits as credit card companies have struggled recently to make money due to ‘rate tarts’ who switch their existing credit card balances to cards offering interest free balance transfers. According to analysts,’ rate tarts’ cost the industry up to £80m a month and as a result some issuers have started charging customers a fee of either 2 per cent of their existing balance or up to £35, which ever is the greater. It therefore should come as no surprise to consumers that firms are introducing other ways to ensure they make more money. In addition to levies for balance transfers, some firms are cutting interest-free periods on balance transfers hoping to charge you interest if you do not pay off your balance before the offer expires. Some firms now offer an extremely low flat interest rate for the lifetime of the credit card balance rather than an interest-free period that reverts to a higher rate when the offer expires, helpful if you are in no rush to repay your card balance. Cards that have ceased to offer interest-free periods altogether include the Halifax Flat Rate Visa, Lloyds TSB’s Advance MasterCard and Bank of Scotland’s Little Black Visa. With that said, paying interest from day one does not necessarily mean a customer is getting a raw deal, the financial product comparison service explained. Sean Gardner: “ These cards will suit some people who regularly carry a balance on their credit card as the rates are among the better on offer.” But he warned: “ It does mean that customers have to be careful when they shop around and be aware of the terms and conditions attached to credit card deals before they take the plunge. Comparing credit cards is becoming more complex and you have to be careful when looking for a new deal.” Wise words indeed.
|
|||||||||||||||
|
|
||||||||||||||||
