Just days after the Bank of England's new Governor, Mark Carney, indicated that the Bank Rate would remain low for the forseeable future, Barclaycard has written to some of its customers changing their terms and conditions.Cardholders with rates that "track" the Bank Rate have been told that from September 1 they will instead be "put on variable interest rates".
In other words Barclaycard's link with the key rate - which has fallen by more than five percentage points since the onset of the banking crisis - has been broken, giving the card issuer freedom to increase its rates at will.It is not clear how many of Barclaycard's total 10m customers are affected, but those whose contracts include the tracker term are expected to be longstanding customers who have held chip card for five years or more.
The lender says those affected are a "minority". Barclaycard will not disclose the rates these borrowers pay, though it is expected they are lower than the rates charged to other cardholders, and The Telegraph is aware that in some cases the tracker rates are as low as 10.5pc. This is unusually low for a credit card rate. The majority of Barclaycard accounts available to new applicants today come with an interest rate almost twice as high.
There is no explanation of why the change is being made, although the letters do point out the alteration comes "at a time when the Bank of England's Base Rate is at an all-time low." The Bank Rate plunged from 5.75pc in mid-2007 to 0.5pc in March 2009 where it has since remained.
Barclaycard declined to say how many customers were implicated but told The Telegraph: "We are simplifying the way we calculate interest on some of our Platinum cards. These will move to a standard variable rate, which is how the vast majority of our interest rates are calculated. We wanted to ensure the best for our customers and so have chosen to introduce these changes at a time that will be most beneficial to them. The switch to the standard variable interest rates reflect our existing rates and the new rates are, in some cases, lower."
Tracker rates on both credit cards and mortgages, agreed before the precipitous plunge in the Bank Rate, have become a nightmare for lenders who have sought to wriggle out of their "tracking" obligations wherever contracts permit.Bank of Ireland UK is the latest lender to become embroiled in this controversy: earlier this year it increased the "differential" by which the mortgages of almost 13,000 borrowers tracked the Base Rate.The Financial Ombudsman Service is currently considering whether this was fair.
Barclaycard's move comes as rates on plastic are drifting up more widely. Moneyfacts, the data compiler, says average long-term card rates - aimed at mainstream borrowers - reached an all-time high in April this year, at 19.1pc. They have since dropped back fractionally to an average 18.9pc, Moneyfacts's Rachel Springall said, though the trend is "in the upward direction."
But while rates are going up, card issuers are competing more aggressively to attract new customers - by offering either low, ongoing rates for those who want to manage balances down over the long term; or by offering extended 0pc deals.
"Today, if you look at the best deals, you've either got a low borrowing rate with no added perks, or you've got a long interest-free period followed by a high revert rate," Ms Springall says. She cites Sainsbury's Bank's Cashback Low Rate card as an example of the former charging 7.8pc. An example of the interest-free offers is Tesco Personal Finance's deal charging 0pc for 18 months, followed by a revert rate of 16.9pc.
Credit cards remain hugely popular and widely-used in Britain, although total borrowing on plastic has been reducing. The latest annual statistics from the UK Cards Association, the sector's trade body, published last month, said outstanding borrowing on credit cards "has fallen from a peak of ￡67.4bn in 2005 to ￡55.1bn at the end of 2012." This represents about 4pc of the country's total personal borrowing of ￡1.4trillion, it said.
I sincerely do not believe I have ever read anything more completely tone-deaf in my life. Does this guy seriously think that it’s easy for a homeless person to just go into McDonald’s or whatever and apply for a job? Does he think it’s easy for anyone to get a job? Especially someone who doesn’t have a home or a change of clothes? Who doesn’t have an ID or a Social Security card or a place of residence? Who can’t bathe? Does he think people are homeless on purpose, because it’s just so luxurious staying in a homeless shelter? Does he not think these people are real human beings?
Organizations like the one Kessler’s son are working for actually help homeless people get jobs. They provide working wardrobes, which give homeless people things to wear for job interviews. They teach literacy and job skills. They help them get back on their feet. Homeless shelters do not cause homelessness anymore than cancer research causes cancer.
Kessler snidely calls these kids “Generation G”– for “Generation Guilty,” because the silly things feel, for some reason, that because they have been born with plenty, that they should go out and do things for others who were not so fortunate. Not so, says Kessler. They’d be doing much more for the world by taking on a job at Jamba Juice, he believes, because trickle-down economics.
Really? Massive wealth? Maybe for hedge fund managers, but certainly not for the rest of us. The rest of us have been in a recession… a recession that was, by the way, partially caused by freaking hedge fund managers! Also, not every “Woodstocker” was Jerry Rubin, who ditched his radical past to become an awful yuppie in the 80′s– and was, quite frankly, pretty awful before then, anyway. I happen to be well acquainted with a quite a few baby boomers who were way too busy actually working for social justice to go to Woodstock. Those people still care, and are still working towards making the world a better place.
I have a dare for people who believe the things that Kessler believes. Don’t shower or change your clothes or brush your teeth or hair for a week, go into a McDonald’s or a Walmart and try to get a job without giving them an ID, SS card or place of residence. Then, tell me how that goes for you, and tell me why we do not need organizations to help these people.
Read the full story at http://www.smartcardfactory.com/CD-RFID-tag_c587!
No comments:
Post a Comment