Banks Targeting The Customers By Increasing Interest Rates

By Author: Jessica Jetti
Total Articles: 26
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The customers also have the opportunity to reject the rise and leave. The next flashpoint between banks and their customers will be the credit cards after clients interest rates were raised by Virgin by 50pc. Virgin Money issued an ultimatum to the customers, which is ‘take it or leave it’. It promised that it would bring the fresh ideas and an injection of new competition into banking and will give the value for customers. The move was taken by the recent rises in mortgage prices from leading banks and building societies. Experts conclude that it will be the next warfront for banks for squeezing profit out of their customers as Bank Rate remains low.
Andrew Hagger, an expert from a popular website warned that loaners are finding it more expensive to get deposits. Kevin Mount ford of Moneysupermarket.com agreed with this statement and said that credit card companies are looking through their books and paying attention at how customers use the cards. The cards of Virgin are run by MBNA which also comprises of its own credit card offering. According to a spokesman from Virgin, own criteria had been used by MBNA for deciding ...
... which customer would see a rise in interest rate. He also said that the customers also had the chance to reject the increase and leave.
Virgin's cards are run by MBNA, which also has its own credit card offering and several other affinity partners. A spokesman for Virgin said MBNA had used its own criteria to decide which customers would see an interest rate rise. He added that customers had the opportunity to reject the increase and leave. But, there are many customers for which probably, there is nowhere to go. Mr. Mount ford said, "Usually the ones who suffer are those who have less than perfect credit records." He also said that that it was arduous to say how many banks and building societies were raising rates for existing customers. It only came into light when the customers informed the press, but it was common and would continue. For the new applications, interest rates on credit cards are already high. Moreover, they have crept up in the previous three years despite the loans Bank Rate of 0.5pc. Apply with instant loans for bad credit and get fast funds at low interest rates.
Moneysupermarket.com presented the figures according to which average interest rate for new customers was 15.7pc in the month of March in the year 2009. But, it had risen to high of 17.3pc by the end of February in 2012. Some increases seem to be very steep for the existing customers. The customers who have been selected by Virgin Money to suffer an interest rate rise will see the price which they pay on purchases increase from 16.8pc to 24.9pc. The cost which they pay on balance transfer has also increased up from 18.9pc to 27.9pc. But a strange thing is that new borrowers will still get the old and more generous terms.

Jessica Jetti is a expert financial advisor. She works with finance in UK financial market. She writes articles on instant loans for bad credit @ http://www.instantloansforbadcredits.co.uk/ , pounds to pockets and instant decision loans