September 02, 2010
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News: UK Credit Card Industry; Slight Upward Swing
The U.K. economy has begun to show some signs that the economy has taken a turn upward. According to a recent report by the Bank of England, during the month of July, credit card companies have stepped up marketing on cards. Small but encouraging considering that over the past two years, lenders had slashed credit limits and essentially halted extending any new credit card offers. Like the U.S., England's lenders too felt the brutality of record breaking high credit card defaults and continued delinquencies.
Recently, however, England has experienced an increase in zero percent interest for extended periods on new credit card offerings. The most appealing offer comes from Tesco as it offers its new Clubcard credit card with a zero percent interest on all purchases for 13 months along with a rewards system. The AA club offers a zero percent introductory rate up to 12 months along with a rewards system and the ability to earn double points on motoring purchases. The Halifax All In One card offers zero percent for the first 10 months on both purchases and balance transfers; however, the percentage jumps to a whopping 15.9 percent after the introductory period. There is also a 3 percent balance transfer fee that accompanies the Halifax offer.Despite the increase in credit card offers, U.K. residents are warned to remain cautious. Consumers must be diligent in reviewing all the terms and conditions of each card's contract prior to making any decision. Although these offers appear to be deals that just can't be passed up, however, if you're doing your homework, you'll find that many are jacking up interest rates to heights above the recession. It's possible that some consumers may find their current card will actually provide a bigger payoff than a zero percent extended offer. Heed the work of Stewart Hoise, a member of the Commons Treasury, said that these promotions may work in the "short term, but the sting in the tail could be more punitive rates later."