The Equalizer

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Saturday, December 31, 2005

Excessive Credit Card Interest Charges

Excessive credit card interest charges are nothing new, but being with us for a long time does not make them okay.

Let's consider the average credit card APR of 24%. How does this compare with other investments for Capital? The average return on investment for property in London is about 6%. That's what landlords are making out of their tenants. So the credit card companies are making four times that.

This also explains why so many banks are willing to pay over the odds to buy a piece of the credit card action. I had two credit card accounts with the Bank of Scotland, one through the Federation of Small Businesses and the other through FHM (a magazine for young gentlemen); then they were bought out by American bank MBNA, and suddenly I was receiving strange looking statements and of course all the rules had changed. I had no control over this.

Make no mistake: the legislation is so lax that the banks have found a way to assume their old colours of userers and shysters, simply by setting up credit card divisions. Watch this space to see how you can reduce your interest to 0%. People never put up with tyranny for long.

Incidentally, have a look at credit card transfers for a great resource to remind you when to transfer your balances to another card (UK version). The US (international) version of the credit card balance transfer alert service is here.

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