The media has rightly exposed some credit card companies for increasing interest rates at a time when the Bank of England Base Rate has reduced. The average interest rate for UK credit card is an APR of 18.2%*.
Saga always aims to treat people properly and we have reduced the interest rate on the Saga Platinum Visa Card over recent months to an APR of 11.9%. In addition, the card has a fair approach to the order of payment** – so the most expensive part of an outstanding balance is paid off first.
If Saga’s approach was adopted across the credit card industry it could pay real dividends for people. The over 50s owe £15.7 billion on their credit cards. If the over 50s switched their credit cards to the Saga Platinum Card they could save some £83m each month – that’s a staggering £995 million a year***. Enough to pay for 10 million weekly full state pensions, two million all-inclusive breaks to Malta or over 66,000 round the world cruises!
The Saga Platinum Visa Card is well known as being a best-buy for overseas purchases. In fact it is also a great all round credit card and offers better terms than most for those who may from time to time have an outstanding balance.
Saga is calling on other card providers to play fair, to reduce their interest rates and adopt a 'fair order of payment' system.
Andrew Goodsell, executive chairman, Saga Group commented: "For too long many users of credit cards have suffered the double whammy of high interest rates and an unfair order of debt repayment which favours the bankers over their customers. We think this is wrong and call on card providers to play fair by the British public. If the bankers don't get the message the Government should act as they have hinted they might have to do in the recent Consumer Affairs White Paper."
*Defaqto / Aequos Online shows the average APR of 223 credit cards is 18.2% correct as at 22nd Sept 2009
**Payments received will be deducted from the outstanding balance on the account in the following order:
• fees from previous statements;
• Cash Advances (including cash from a Cash Machine) from previous statements; and
• purchases from previous statements.
The remainder (if any) will be applied to transactions on the current Statement in the following order:
• Cash Advances;
• purchases and Balance Transfers; and,
• any other promotional offers.
***Datamonitor research indicates that in June 2009 people aged 50-64 owed £14,809 million, and people aged 65+ owe £980 million on their credit cards.
Saga Platinum Visa Card APR is 11.9% - 6.3% less than the average
6.3% of £15,789 is £995m
For more information please contact the Saga Press Office on 01303 771529.