This move comes at a time when interest rates continue to rise in England. Average rates are currently the highest they have been in roughly a decade. During the banking crisis of 2008 many credit card companies increased interest so customers saw a rise in personal debt. High unemployment levels in Great Britain have also pushed up interest rates as lenders are nervous about customers meeting their repayments.
Experts at Provideo Financial have commented that banks are using high interest rates to write-off more debt. Last decade, write-offs were practically unheard of but in 2010 over £5.3bn in debt was written off. Despite this factor interest rates are tipped to continue to rise.
It’s not all good news for the U.S. however as there has been no standardisation for the criteria that dictates customers are eligible for lower rates. The outcome is that each bank uses varying levels of assessment. That might still not sound so bad but there is a catch: banks are beavering away, trying to make up for money lost from to the CARD act by adding higher fees to current accounts and debit cards. This then seems to be a reversal of what is happening in England.
With the world struggling against rising interest rates, what’s the lesson in all of this? Banks are at the end of the day businesses, and colossal ones at that. They are cash cows that will always strive to maximise profit margins. Don’t expect banks to give you anything for free, the same way you wouldn’t expect to walk into a shop and be given free goods. Make no mistake, if you are in debt you will pay for it. The only ones who really win are those who are savvy enough to be in credit.
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About Provideo Financial:
Provideo Financial is a family oriented firm that operates on a set of sound financial strategies designed to maximize our client's investment opportunities.
For more information about Provideo Financial please visit http://www.provideofinancial.com