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Those in the know feel that it is about time there was a supervisory authority to look at credit card interest rates.
Issuers of credit cards have been allowed to get away with outrageous interest charges forced on their clients. Actually, interest can touch as much as 20% on dues due to credit cards which has caused several customers getting into severe financial trouble.
Issuers of credit cards have been ludicrous when dealing with interest charges and many financial specialists feel it is due to the fact they have been continuing with it in the absence of any statutory body. Credit card companies justify the misold PPI and interest charges, to themselves presumably, that the abnormally high amount is a must so as to match the giant profits they make with the non-payments.
Looked at logically, they must be able to see the defaults are the result of the exorbitant interest they want and nothing else, a figure which can go even higher because of missed submission of charges or if only the minimum amount due is paid.
Even though there is a basic interest rate of 0.5 per cent in the UK, the rates for plastic can just go through the roof. It is about time this state of affairs is being questioned and isn’t only financial experts, but ordinary people who use missold PPI and cards and have been shocked by the massive amounts of interest who think it is about time the organizations were brought under control.
Credit card firms have a lot of thinking to do as does the government. People are fed up of having to give such massive payments on even simple items simply because they utilized their plastic for the purchase. Placing an additional 20 pounds to a 100 pound buy is serious business and the higher the amount given for the goods or services, it is obvious that people will be struggling to pay the money back.
But the question that obviously arises is how much power will the supervisory organization if ushered in be allotted? Will it have sweeping powers on the lines of the Bank of England to watch over matters when it comes to plastic? Will it be provided with the powers to punish errant credit card issuers being over a specific specified interest rate?
These are questions that should be looked into although financial specialists and the man on the street wishes the answers on mis sold PPI are available soon or more consumers will end up without a single penny to their name.
Clearly regulation of the credit card industry is a necessity. For long, credit card companies have been allowed to get away with charging exorbitant interest rates and the people have had to pay for it. Many have even gone into bankruptcy because of the profiteering of the card companies.
