There have been reports that many card companies such as Barclays have increased their credit card interest rates by 20% and thousands of customers from the UK are fuming. However, card holders have a choice now with the new rules in place, and they can reject the increase within a 60-day period. Reports in the press have condemned the 20% increase from Barclays on.
Some useful tips to beat the hike in credit card rates:
- Make use of the right to reject the increase within the 60-day period. If the customer does not accept the hike in rates, they can choose to give up the card and close their accounts. The outstanding debts could be paid off in installments instead of paying a lump sum and these payments will be made with the current interest rates. The card, however, cannot be used to make new purchases.
Martyn Saville, credit card expert feels that this hike in interest rates by the banks is outrageous. He feels that the 20% hike is unjustifiable and the banks should not make excuses for having reviewed individuals` accounts to justify their interest rate increase. He also adds that, the base rate for the last two years has been at 0.5% and Libor (banks` lending rates to each other) is well below 0.8%. He feels that the banks` claim about reviewing individual accounts, etc., will only squeeze the customer out of every last penny, which would be used to increase the banks` profit margins as well as to help subsidize new businesses.
- Rejecting the hike in interest rates will help in saving money, but switching to a new card altogether will help to save even more money. The irony of Barclays is that, they still have the best 0% balance transfer offer in the market. However, for someone who already possesses a Barclays, switching their existing debt to an interest-free deal will not be possible.
The best deals could be found by reading “Which? Credit card reviews” and by using the “credit card switching calculator” where one could work out the money that could be saved. However, as a rule the best deals will only go to the ones with the best scores. If you wish to increase your chances of getting a new credit card then read the “credit report explained” which is a free guide and get some useful tips.