Interest Rates Unchanged - NOT LIKELY!

Posted on: 08/07/2011

Every month now for as long as I can remember, the Bank of England worthies who decide what happens to interest rates have decided "no change".
This should of course be reassuring to those of us who have a little debt - we should have no more to pay if interest rates stay the same.
However, as ever, there is a trick in the tail (or in this case, a kick in my curvy ass!) That trick is that high street Banks often don't pay a blind bit of notice to what the B of E says!
Look at loans to UK businesses. For several years now, the Mother of World Banks has been telling the banks (as has the British Government) that they must lend more if the UK economy is to recover. Since the Government is a major shareholder in at least two banks, and the B of E is the lender of last resort, you would have thought some lending might have been stimulated.
The banks have continued to starve UK PLC of money and the economy has continued to struggle.
Now back to little old me…
I received my Nat West credit card statement in the post the other day, along with a covering letter. (I keep one credit card, by the way, just to remind me what a silly way of borrowing money it is!)
The Bank of England may be happy to freeze interest rates but Nat West - part of the Royal Bank of Scotland Group (80% owned by the Government, mind) certainly is not!
In my letter came the announcement, without explanation, that my Black Card interest rate is going up from 12.5% to 14.7% - an increase of over 17%!
Now it happens that I almost always pay my card bill off every month, so the impact on me personally is negligible - BUT I AM VERY LUCKY!
Others, who are not so fortunate, could find such an increase crippling.
And what is the justification? Certainly not an increase in the Bank of England Base Rate - it has been 0.5% for 2 years.
It can also have zero to do with rising costs. Everyone knows that the Royal Bank of Scotland Group have been making many thousands of their staff redundant over the last couple of years. SO THEIR OPERATING COSTS HAVE ACTUALLY BEEN GOING DOWN!
So why the huge rise in interest charged? Simple - SHEER GREED.
I shall be writing to Stephen Hester, Chief Executive of the Royal Bank of Scotland, giving him a large piece of my mind - AND, when Cash-is-Cool holds the "CUT UP A CARD DAY" in August, my NatWest Card will be first for the chop.
Take my advice: take your scissors to at least one "rip off" card at the same time as I do!

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