So credit card companies are raising their rates of interest while the economy goes into freefall? Should I be surprised? Don't think so.
They argue that there is an increase in repayment defaulting, so all those who do keep up their repayments are effectively being made to make up the balance. Nice one. This must be one of those Business School of Ethics clauses: "Shaft thy custom till thou crippled and bleed thee dry through courts of law".
Credit Card companies have followed the same gameplan as the banks. Saturate the maket with offers and huge credit extensions and when people have wracked up uncontrolable debt, complain that your not getting the money repaid. Duh!
Maybe if they were more financially astute at setting limits on accounts in the first place they wouldn't be spreading the debt to the rest of their customers. How many of those companies are affiliated to the same banks which are getting bailed out? The government should be pressing the cc companies to reduce the rates relative to the BoE interest rate cuts just like the banks. Short term strategies to claw back as much as possible isn't going to reinvigorate the market. A large swathe of the population are going to be more reluctant to buy into the credit card philosophy unless those companies are capable of displaying a social economic market strategy.
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