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High credit card interest rates hurt the consumer
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April 14th, 2011Uncategorized
Experts believe that it is high time there was a monitoring body to monitor credit card interest rates.
Banks issuing credit cards have been allowed to get away with outrageous interest rates placed on their clients. In fact, interest can reach as high as 20 per cent on dues due to credit cards which has led to lots of cardholders getting into deep debt.
Issuers of credit cards have been running riot when dealing with interest charges and many consumers feel it is due to the fact they have been getting away with it in the absence of any regulatory organization. Credit card firms stand up for the misold PPI and interest charges, to themselves no doubt, that the high charge is a necessity allowing them to balance the large earnings they make with the non-payments.
Seen rationally, they should admit the defaults are on account of the huge interest they charge and that’s it, a rate which can rise even higher in the case of delayed submission of dues or if only the minimum amount due is paid.
Even though there is a basic interest amount of 0.5 per cent in the British Isles, the charges for plastic can almost break all barriers. It is about time this problem is being probed and isn’t just financial experts, but ordinary folks who make use of missold PPI and cards and have been affected by the high rates of interest who think it is high time the issuers were brought under control.
Credit card outfits have a great deal of to do as does the government. Consumers are sick of being made to give such exorbitant amounts on regular purchases just because they made use of their card for the purchase. Placing an additional 20 pounds to a 100 pound buy is no joke and the higher the money given for the product or service, it is evident that people will be struggling to pay the money back.
However the question that naturally arises is how much authority will the supervisory body if brought in be allotted? Will it have sweeping powers similar to the Bank of England to watch over matters when it comes to credit cards? Will it be provided with the powers to penalize errant credit card issuers being over a specific basic interest rate?
These are issues that need to be probed although experts and the consumer hopes the answers on mis sold PPI are available soon or more consumers will even go bankrupt.
Clearly monitoring of the credit card industry is a necessity. For a long time, card issuers have been allowed to get away with charging atrocious interest rates and the consumers have had to suffer. A lot have even declared insolvency because of the profiteering of the card firms.
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Tags: borrowing, credit cards, loans, personal finance
8 responses to “High credit card interest rates hurt the consumer” 
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Katherine Torres November 2nd, 2011 at 20:01
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