Credit card holders could face 10,000% interest on one pence
April 5, 2008 by admin
Filed under News, News-Credit-Cards
Credit card holders who have one pence on the balance of their credit cards could face being charged up to 10,000 per cent interest. 
US financial service providers Citibank, who own Egg the company who laid off 161,000 customers, announced it will increase the minimum interest charge for its 900,000 UK customers from 50p to £1 in May.
This means that a customer with one pence outstanding on their bill would be charged £1 – nearly 10,000 per cent interest.
Speaking to the Times, Sean Gardner of comparison firm Moneyexpert said: “Minimum interest charges are commonplace, although the details are typically hidden deep in the terms and conditions of your credit-card application.”
New figures from the Bank of England show that the average credit-card interest rate has increased to 17.67 per cent from 16.98 per cent a year ago.
Halifax, Bank of Scotland, Intelligent Finance and Egg, impose a minimum 50p charge for customers who pay interest on their bill.
Now Citigroup and Barclays charge a minimum of one pound.
