27 million miss out on reduced interest rates on loans and credit cards

Fool.co.uk responds to the BERR’s ‘Fair Principles’ for credit cards

Money website Fool.co.uk acknowledges the move by credit-card companies to “play fair” with customers. But many customers are still missing out on lower interest rates on their credit because they think Annual Percentage Rates (APRs) are set in stone.

• A quarter (25%) don’t know how much interest they pay on their credit cards or loans
• Three out of four (76%) are unaware you can haggle over these interest rates
• One in eight (13%) has tried to negotiate APRs with their lenders

Bargaining in shops is fairly widespread. But Fool.co.uk reveals that three quarters of us (76%) are not aware¹ that it is possible to negotiate better interest rates on credit cards and loans too. In other words, 27 million people may be on higher interest rates than necessary².

While one in four (24%) people know that APRs are negotiable, only one in eight (13%) customers has attempted to get a competitive rate. And one in ten (10%) has succeeded in doing so. Elsewhere, one in four people (25%) does not know how much interest they pay, even though typical credit-card rates are around 16.5%.

David Kuo, financial expert at Fool.co.uk says: “Credit card providers have done a great job peddling the idea that the interest rates they charge are one of the unchangeable facts of finance.

“Consequently, many people believe that the interest rates they are offered cannot be altered. But nothing could be further from the truth.

“The recent move by the Department for Business Enterprise & Regulatory Reform to impose a new set of fair principles is nothing more than pointless foot stamping by another Government division.

“If you always pay off your credit card balances in full, then APRs are irrelevant. But if you don’t, then you are probably paying more than you need to.

“If you are unhappy with the interest rate you are paying then it can’t hurt to ask for a better one. If you don’t ask, how do you know you won’t get it? The worst thing that can happen is that they say no.”

-ENDS-

For further information and/or to arrange an interview with David Kuo, please contact:

Lucy Morrison, Fool.co.uk, on 020 7297 8187 or Lucym@fool.co.uk

An ISDN line is available for radio interviews

Notes to Editors:

1. A survey of 1,493 Fool Jury research panel members between 11 to 15 October 2008

2. 87% of 31 million credit card customers have NOT asked for better interest rates. There are 31 million personal credit and charge card holders in the UK. (APACS: Plastic cards in the UK and how we use them in 2007)

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