American Expess has increased the cost of borrowing on one of its credit cards to 46 per cent — more than 30 times the Bank of England base rate. The company now charges 46 per cent APR on the card, making it Britain’s most expensive credit card. Consumer groups said the cost of borrowing on some credit cards had now lost all touch with the base rate. A series of other cards also have APR over 35 per cent — despite interest rates now being at the lowest level since the Bank of England was set up in 1694.
Other cards include Virgin Money American Express at 37 per cent and Citi MasterCard at 41 per cent. Consumer group Which!’s credit card expert Martyn Saville said the Amex rate was ‘ridiculous’. He said: ‘This is over 30 times base rate. ‘Credit card interest rates now bear no resemblance to Bank rates — it is just about what companies think they can get away with. ‘Even at 19.9 per cent it is far too high.’
The Amex rate was sent soaring from 36.6 per cent to 46 per cent because the issuer increased the annual charge paid by customers from £120 to £150.
This is LOL funny. My thoughts? Use cash before it becomes illegal to do so.
I think it is cheaper and safer to use a loan shark than use this credit card. Cripes!
The interest rate is 19.9%. Still high, but nothing like the sensationalist 46% headline. The reviewers somehow factor in the annual fee into the interest rate.
Meh, the APR is Moot if you pay of your balance every month.
maybe before the banks get any funny ideas around here, we remake usury laws to put a hard cap at 12% over the fed funds rate, no ifs, ands or buts? and make it retroactive on all accounts, no matter what the rates are currently?
and if the banks say we’ll have to not give out as many credit cards, is that really a bad thing for a country getting its house in order?
and while we’re at it, savings accounts that at a minimum have to pay out the fed funds rate plus the inflation rate? that way there’s an incentive to save, giving the banks to power to lend the old fashioned way?
Plenty of credit cards get taken out by foreign workers and students, who go on shopping sprees before going back to their home country.
3,
You have a consumer based economy. The way to support a consumer based economy is to have a debt based economy.
NO ONE can afford a home outright. That’s why you get a mortgage. That kind of thinking was just applied to all the other aspects of life. Just try to keep your balance sheet as close to positive as possible. Even the tax system is built this way… Try to get as many loses in a year to recoup at the end of it…
Time was a single income could afford to BUY a home outright.
The other shoe has fallen. The credit card industry is about to go bust and since most credit cards are unsecured loans the banking industry is in for some deep shit. I suggest getting cash reserves now before the banks close. Everybody’s credit score will be 0 soon.
Have you noticed how many billionaires from Spain to India to New York City are being charged with fraud? I predict the next Arthur Anderson to be Price Waterhouse, it’s just an opinion mind you.
Credit cards=
A loan company that can change the rate by sending you a letter in the mail.
ANY other loan is protected from Changing rates, but not CC cards.
@ #5 – when was that time? You can’t afford a home outright if you spend all of the money you make and then spend even more and put it on credit cards. There was a time when people would actually save their money for YEARS in order to buy a home. People would live modestly and knew the value of money. Instead we spend our money on things those people never would have wasted it on.
Amex don’t do credit cards. They do charge cards. You’re supposed to pay it off in full every month, hence the high penalty for not paying. If this was indeed a credit card, that would be a very high interest rate, and this would be a story.
#10, Google “Is Amex credit card”, and tell me what it says….form the amex website……
#10 that was true like a decade or more ago but they have several real credit cards like the “blue” one.
I pay my card off every month so the interest rate doesn’t really matter to me.
First, AMEX does have credit cards. Second, there is no rate limit if the company has it’s offices in North Dakota or Delaware. Check out ‘Eight things a credit card user should know’ from PBS Frontline : http://tinyurl.com/55ad8
It should scare the crap out of you.
#11 Amex was and is not a Credit Card like Visa or MC. You always had to pay the balance at the end of the month in full or pay very high Interest rate. They make their money by charging high yearly fees and the Merchant pays a higher usage fee than Visa/MC. That’s why many stores don’t take it. That’s why the advertise that they don’t have a limit on their cards(they do but not like Visa/MC). I can go on and on how Amex is not a credit card like Visa/MC.
#2 jim ” maybe before the banks get any funny ideas around here, we remake usury laws to put a hard cap at 12% over the fed funds rate, no ifs, ands or buts?”
Usury Laws are still in effect and still enforced. The problem is a federal court ruling that States can enforce them on company in other states (something like that). That’s why all credit cards come from 1 of 2 stated. Wilmington, DE and Des Moines, IA. They have less restrictive usury laws than other states. Do you think they are going to change their Usury laws and loose all that tax money from the Credit Card companies. If I remember right they active promoted their lax usury to get the companies to build there. You need look at the history of Credit cards. Because when it first started back in the 1970’s it was how banks got around high interest rates because usury laws wouldn’t let them charge less and easier to get loans.
So the Feds would need to fix this if they can. I forget what the court ruling actually said.
#11 also see what #13 GF said that’s where I saw the history of Credit cards I’m talking about but forgot where. It’s a good video. Thanks for the link GF.
“The Amex rate was sent soaring from 36.6 per cent to 46 per cent because the issuer increased the annual charge paid by customers from £120 to £150.”
Translation:
“You have to pay more for the card. To compensate for this, we’re going to charge more interest.”
Does this make ANY sense WHATSOEVER????
#16. Um…no
# 4 Jim
AMEN!
But do you think congress will honestly represent the interest of their constituent citizens or will they represent their biggest donors?
The Feds are practically giving away money for free, so how come my credit card rates are still usurious?
#9 – Thermo
>>There was a time when people would actually
>>save their money for YEARS in order to buy a
>>home.
Who? Liberace? Wayne Newton? The Rockefellers?
Everyone I know who bought a house “back in the day” saved for YEARS to build up a 20% down payment, then got a mortgage for the rest.
Then the predators discovered ways to sucker in people without a pot to piss in with low- or no-downpayments ARMS, bundled them into CDOs, sold them off to somebody in Timbuktu who insured the nonsensical derivatives with credit default swaps, and next thing you know, we’ve got a meltdown.
9,
22,
Not my own personal experience, but my dads. He wasn’t a rich dude. It was just a long time ago (he’s reaching 80 soon *knock on wood*).
As for the 20% down thingy… In Soviet Cannuckistan you CANNOT get a mortgage if your debt ratio is too high. On top of that, if you don’t have 25% for a down payment, you MUST get CMHC (Canada Mortgage Housing Corporation) insurance for the mortgage. CMHC is a crown corporation. Interesting stuff for the freedom loving, freedom shootin’ ‘Mericans, no?
What is wrong with people that would even consider taking on of those cards as a gift?
Burn the darn thing!
These people are enough to give loan sharks a good name!
There is need to even have a credit card.
#23 – Deborah
Hey! Got any hot deals on term life insurance, baby?
[She sneaked one in, but she’s gone now. – ed.]