UK Credit Card Rate War Looms Large
At long last UK consumers are finally faced with some goods following the decision by Yorkshire and Clydesdale Bank to cancel the balance transfer levies on their existing Gold MasterCard Products.
After a succession of depressing tales of woes insofar as their finances are concerned, price comparison website moneysupermarket.com claims that the average British consumer may finally see some benefit as the UK may now be on the brink of a “tactical rate war” among UK credit card issuers following the decision of Yorkshire and Clydesdale Bank to cancel its balance transfer fees on Gold MasterCards. What is for sure is that the move by Yorkshire and Clydesdale Bank certainly bucks the recent trend by most UK credit card issuers, following the ruling by the Office of Fair Trading (“OFT”) that UK credit card default charges were both “unfair” and “unlawful” in 2006, to standardising their balance transfer fees. As such, 2007 already looks like it could be a year in which the rights of UK credit card consumers could finally start to move in the right direction as they finally begin to reap some of the financial benefits of having a credit card.
Additional good news is that not only has the Yorkshire and Clydesdale Bank’s decision to cancel balance transfer fees meet with general approval, but recently reintroduced zero percent balance transfer offers by major leading UK credit card issuers have also been instant hits, again, with UK credit cardholders - especially among those who overspent during the Christmas and New Year holidays and are now looking for cheaper ways to repay their credit card debt. As is the case with balance transfer fees, it had generally been assumed that UK credit card issuers would phase out their zero percent balance offers following the OFT ruling in order to recoup part of the estimated billion pounds a year in profits UK credit card issuers were going to lose.
Commenting on the decision by Yorkshire and Clydesdale to cancel its fees on balance transfers, Rob Kenley, head of credit cards at moneysupermarket.com, said: “This is great news for consumers as not only is this an attractive deal for many people who have been left in the red after overspending at Christmas, but if other providers do follow suit it could prove beneficial for credit card users in the long run.”
While nobody can guarantee that the UK credit card industry is on the cusp of a cut-throat rate war, if previous history in this sector is anything to go by, UK credit cardholders can sit back in the knowledge that they should be expecting some kind of benefit to be offered to them by their credit card providers if the credit card providers want to avoid losing your custom in this intensely competitive market sector.
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