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By Reno Charlton
News Editor, 8 April 2008
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IT has been revealed that the Halifax has recently raised the interest rate on its credit card, with some customers being hit by raises of five percent on their credit card rates.
Most of us tend to assume that when our credit card interest rate goes up we have no choice but to pay the higher rate, but it seems that this is not always the case, as has been proven by the recent rate hike by the Halifax.
Over recent months, as the global credit crunch continues to gather momentum and wreak havoc in the financial markets, credit card providers have tried to find various ways in which to minimise risk to themselves and maximise profits at a financially turbulent time.
This has been done through various actions, such as increasing fees and charges, cutting credit limits, withdrawing credit card facilities from high risk customers, and increasing interest rates for new and existing customers.
For Halifax customers the rate hike was up to five percent, and this added a considerable amount to the amount that had to be repaid on consumers' credit card debts.
However, the rate hike has not been set in stone, as was proven by one customer, and experts have advised those affected to query the rate hike if they feel that they have a valid case to have the rate dropped back to its original level.
One customer recently explained how his Halifax credit card interest rate had rocketed from 10.9% to 15.9%.
He had been a customer with the bank for eight years, and had never missed a repayment on his card. With this in mind he called the bank and questioned the interest rate hike. According to the customer the Halifax then agreed to drop the interest rate back to its original level given his good repayment record and longstanding relationship with the Halifax.
Customers who have their credit card interest rates hiked up are advised to contact their bank if they have good credit and a good repayment history, as there is a chance that the bank will reconsider the rate hike in situations such as this and therefore may drop the interest rate back down again.
Lyndsey Burton from Credit Card Comparison Online said: "Many credit card providers have increased interest rates for customers, and it is well worth trying to get the provider to drop the rate back down. The worst that can happen is that the provider says no, at which point you can simply start looking around for a more competitive deal on a different credit card."
If your interest rate has gone up considerably over the last few months it's a good idea to start comparing low interest rate credit cards to switch to a more competitive deal.
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