The Bank of England has reduced interest rates in the last two years. The rate for banks and lenders is at .5 percent. That is the lowest the interest rate has been in several decades. However, despite the lowering of the interest rates credit card companies are not lowering their interest rates. Many credit card companies have actually increased their rates. Some have lowered their rates though. The one area we are not seeing much change at all is in the store credit cards. Store credit cards are still at 24 percent or more for interest rates.
Store credit cards do have higher costs than the Bank of England interest rate, but they are still making about a 100 percent profit from consumers with store cards due to the over inflated interest rate. Default rates on store credit card rates are increasing. More people suffering from financial distress are caught in the store card trap. They are unable to meet their obligations and there is no clear strategy that they can use to get out of the financial trouble. Store cards are going to remain expensive, so for a consumer needing a credit card it is better to go with a traditional card over a store card.
More than ever before 0 credit cards, by this I mean ones with 0% balance transfer offers are more popular than ever before.
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