The media have finally (?) woken up to the fact that whilst the Bank Of England’s has kept the minimum lending rate at 0.5% for a record period of time Credit Card companies have INCREASED their rates from about 17% to 24 or even 27% !
What gives you may ask ?
Well they say their interest rates are not only based upon the lending rate but as people cut back on their spending they lose revenue ( profits ) plus they also, in these ‘poor’ economic times, get more bad depts. It may be poor for the rest of us but they counter their loss in profits by increasing the interest payments of their customers, just like the councils do.
I cannot think of many companies who can trade this way.
I only ever use a debit card. There is normally no charge for doing so. Saves me carrying huge wads of cash. If I mislay it I cancel ASAP. So far no problems but I did mislay it once, my wife found it in her handbag a couple of days later. I had passed it to her for safekeeping whilst I did something or other. We both forgot about it. (It's an age related thing).
I have one Credit Card with just a 6.9% interest rate and its also the one with the highest Credit Limit.
I use my cards to manage my money and for convenience, not to spend that which I don't have. Like Jack says I clear my cards every month so they don't cost me anything. I have on a couple of occasions spread them over 2 or 3 months when making a major purchase, for convenience sake, but this is a rare exception.
Referring to credit and perhaps some store cards, it can be a windfall break if you hold the right card, because some can provide 'interest free' options or cash-back on some purchases, so it doe's pay to be selective. A typical example can be an Argos card with options of 3 to 9 month interest free payments on slightly higher priced items.
I notice that some credit card companies have stopped their practice of cancelling agreements on good payers. Perhaps they have had a feeling guilty bout?.