Tuesday, April 29, 2008

Credit card rate hike from Halifax

The Halifax has recently contacted customers to inform them that their credit card interest rate is being hiked up, and in some cases credit card customers of the bank have seen huge rises in their interest rate. Many could end up paying around 5% more in interest on their credit cards, and this is despite the two recent base rate cuts applied by the Bank of England. The Halifax is one of a number of 0% credit card providers that seems to be passing on the cost of the credit crunch to customers through increased fees and rates.

Recently Egg caused outrage by withdrawing the credit card facilities of 161,000 customers, stating that the customers were a bad credit risk. However, it was revealed that many had never missed a repayment and had good credit, fuelling speculation that Egg had in fact withdrawn the facilities of those with good credit because they did not make enough profit from them. The higher borrowing costs for banks resulting from the global credit crunch also seem to have been passed on to the customer through raised fees and charges.

However, customers are being urged to contact the Halifax if they have been a customer with the bank for a fair amount of time, have not missed repayments on their credit card, and have a good credit history, as in some cases the bank may be able to reverse the interest rate hike and revert the card back to its original rate. One customer explained that the bank raised his card rate from 10.9% to 15.9% for no apparent reason, and having been with the Halifax for eight years and never missing a payment on his card he contacted the bank. After the phone call the Halifax agreed to drop his interest rate back down to 10.9%.