June 5, 2009
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News: Overseas Residents Hurting Too
Americans have been beat over the head and bleed dry over the past few years by the deceptive practices of credit card companies. To the credit of U.S. lawmakers, new legislation aimed at protecting Americans and reining in lenders. With the new bill, Americans will soon feel some relief. But how are other countries faring with the credit card industry? It appears our friends in the United Kingdom (UK) are experiencing the same escalating abuses. A recent study shows that during this past year, 12 credit card issuers operating in the UK have raised interest rates. Some include Capital One Bank, Nationwide, and Halifax Bank. Other examples are the Mint, NatWest and the Royal Bank of Scotland (RBS) which have increased rates to 16.9% from 12.9% in 2008. The UK's popular internet bank, Smile, has increased their interest rate on their Classic Visa card to 20.9% up from 16.9% in 2008.
Foreign credit card companies are also cutting their rewards. The Bank of Ireland has slashed its cash rewards from 1.5% to .5%. Ireland's Ulster Bank at one time offered a 0% balance transfer and now charges 4.95%. Additionally, Debenhams, a British merchant that has franchises in the UK and other countries has reduced its card cash advance fee from 1.5% to 3%. UK residents have continued to be beaten down by lenders despite the fact that the Bank of England's prime rate has continued to fall lower and lower and the LIBOR lending rate between banks has also declined. So as interest rates continue to rise and base rate falls, the gap between UK credit card consumers and lender earnings widen.
Despite the massive increases by these UK lenders, there is at least one company making a difference to help consumers. Marks & Spencer Money (M&S) is a premier money retailer. Marks & Spencer, who markets insurance products, loans, savings products, as well as credit cards, recently reduced their card interest rate to 15.9% down from 18.9%. Although these deals are more difficult to qualify for, they do exist. Consumers should be savvy in seeking out deals that will give more than take.