Consumer watchdog critical of HBOS credit card changes

Thu, 14 Apr 2011

Which? has branded changes to credit card rates by Halifax and the Bank of Scotland (HBOS) as "cynical".

HBOS announced a series of changes to credit card rates this week, which included linking them to the Bank of England base rate.

This means that, if the base rate rises by 0.25 per cent, so will customers’ credit card interest charges.

While it also means that if the Bank's base rate is lowered, HBOS credit card holders will benefit, Which? says it is widely accepted that in the short to medium-term the base rate is only likely to go up.

"Locking the rate into base rate when this is at a historical low and likely to increase feels like a cynical ploy to squeeze more interest out of HBOS customers," said Which? credit card expert Martyn Saville.

HBOS also announced that its credit card holders are to be charged single personal interest rate in future, instead of different rates depending on whether the money owed is from a purchase or cash withdrawal.

This rate will be individual to each customer based on how they use their card.
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