Thursday, June 18, 2009

Some things never change

For example, credit card interest rates.

Despite the massive reduction in the BoE's bank rate, credit card companies are still charging, on average, over 12 percent interest rates.

It is a good thing; the higher the better. Hopefully, it will discourage people from taking on credit card debt.

4 comments:

  1. London estate agentJune 18, 2009 at 10:22 AM

    This confirms what I have long suspected.

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  2. Credit card rates are actually the only accurate reflection of inflation and market price for credit. Long may they remain high: nobody should be living off a credit card.

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  3. Credit card rates include the costs of default. If you have a credit card you pay for everybody who doesn't.

    If you don't like the rate, guess what you need to do...

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  4. Its not necessary to pay interest at all. Pay off your balance each month.

    These bits of plastic are very useful. You can buy goods worldwide with low transaction costs. You can guarantee hotel rooms. You can cover cashflow cycles in your personal income. They are as indispensable as a mobile or the internet. But anyone who uses them for cheap credit is crazy. If you need to borrow money, ask your bank for a loan.

    ReplyDelete