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Rate cut ‘should’ help clear debt

The Bank of England last week cut interest rates yet again to an incredible all time low of just one per cent – which should be great news for anyone with any debt.

While we all know it’s highly unlikely mortgage lenders will pass much of a cut on to borrowers, you’d have thought we would at least start to see some sort of cash benefit in our monthly outgoings.

But while the Bank of England rates have been slashed, credit card companies are not following suit.

Capital One, one of the country’s biggest credit card providers, are offering credit cards at an extortionate 34.9 per cent to “people who need to strengthen their credit rating”. Read “the people who can least afford to burden themselves with massive debt”.

Vanquis (a subsidiary of door-step lenders Provident Financial) are charging 39.9 per cent on purchases and 49.9 per cent on cash advances, while SAV Credit issued by the Halifax Bank of Scotland is charging 35.9 per cent on a MasterCard.

The British Airways Premium Plus card from American Express is top of the interest-charge pile at an astonishing 46 per cent APR having just increased its charges by 9.4 per cent.

These rates are outrageous and seem to completely fly in the face of all guidelines recently issued by the Government that lenders should pass on cuts in interest rates to customers.

Business secretary Peter Mandelson threatened to bring in the Office of Fair Trading to deal with credit card companies who use unfair practice.

It’s high time he got on the phone and made a call.

Visit the original article by Melinda Webb at: http://www.getreading.co.uk/blogs/andanotherthing/s/2044689_rate_cut_should_help_clear_debt