Saturday, November 21, 2009

A 40% interest rate? Ho, Ho, Doh!

Nothing will put a lump of coal in the stockings of retailers this year quite like seeing Christmas sales completely evaporate.

And the chill is now on.

Word came out yesterday that some US credit card firms are pushing up interest rates by as much as 7% ahead of Christmas - and that's in addition to some heavy increases already implemented.

For the likes of Capital One, it means some customers will be paying almost 40% interest on their Christmas gifts and January sale purchases unless they clear the balance on their cards.

Angry Capital One customers have been complaining in a forum on the consumer website

One said: "My World Mastercard's old rate is 15.9% and its new rate is 23.9%. I told Capital One it's no better than legalised extortion. I've never missed a payment or paid late - what a way to treat customers."

Another said: "My Capital One Classic Visa's old rate was 30.04%, new rate 39.9%. I'll be closing my card."

Capital One's reponse: "Due to current market conditions, we have had to increase rates for some customers."

Yes Virginia, there is a Santa Claus. There just won't be any presents this year.


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  1. Again, if the customer has always paid off their card, then it doesn't matter if the interest rate is 200%! You only pay interest if you don't pay off the balance....

  2. Our entire economy is based on people buying on credit and paying back later - and not always right away. It's another sign that our economy can't go back to the way it was. Recovery isn't going to happen, at least for a very long time.

    Which means the stock market is way out of alignment, there will be more layoffs, more closures, less tax revenue, and one hell of a lot more cutbacks coming.

    You have to figure that at some point the bubble will burst on real estate as a result.

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