Jim Spowart calls for government action on excessive credit card interest rates.

The government should order health warning labels on all credit cards offering rates that are more than 10 per cent above the base lending rate, urges Jim Spowart, the chairman of Peopleschampion.com.

“Credit cards are an essential part of our everyday lives but some of the current rates are usury and there is no justification for this other than pure banking greed. The US government has put in legislation about the cost of gambling – it’s time we did something in the UK about credit cards.”

“What other consumer industry in the UK is allowed to make a 200 per cent mark-up, then some more? Why are they getting away with this?”

“Lenders are allowed twice the cost of their money* and then they charge the consumer over and above for services,” says Jim Spowart. “This really is institutional usury and the customers are paying through the nose for this. There is no rational reason why some credit cards should be pushing nearly 20 per cent – and some store cards are even worse.”

“What we need is legislation in the UK which would insist that lenders highlight the fact that they are charging 200 per cent about the Bank of England’s base rate. The cost of these excessive interest rates is certainly contributing to the customers’ inability to pay bills”.

Peopleschampion.com will be launching a campaign to highlight the worst offenders. Spowart said the cost of personal loans has come down significantly and some are available at 5.8 per cent, yet credit cards have remained an easy cash cow for banks and lenders with the average at 15.9 per cent. “That’s more that 10 per cent difference,” he says. “Surely a profit margin of 10 per cent above the base rate – at 4.75 per cent – is more than ample to provide an appropriate return to financial institutions, bearing in mind the other charges.”

*Bank of England base rate at 4.75 per cent on 6 October 2006

What do you think? Support our campaign and let us know by emailing: contactus@peopleschampion.com

To compare and apply for the best credit card click here

« return to news index