Changes coming into force later in 2011 will see Bank of Scotland credit card customers
paying interest charges based on their personal usage levels. The Scotsman reports that from
August, ‘borrowers with Bank of Scotland and Halifax will move to a single personal rate based on
the average of the interest charges on their card in the first three months of this year.’
Change to charging rates
The single rate of interest will apply to both purchases and cash withdrawals in a move that the bank
claimed would help users understand the costs of their borrowing. From November, the new rates
offered to customers will be made up of the Bank base rate plus their own personal rate.
The Bank claimed most customers would subsequently pay less interest, the same or marginally
more for every £1,000 borrowed.
Ken Stannard, director for credit cards at Bank of Scotland, said: “This is straightforward and fair
pricing, which will give our customers far greater transparency and control over their interest rates.
Our customers tell us that one, simple rate makes it easier to understand their credit card, and they
want to better understand how and why their interest rates may change.”
Credit card rates ‘only likely to be upwards’
Customers who have held a credit card with Bank of Scotland for more than six months as at the end
of March 2011 will be told in the next few weeks how the changes will affect them.
However, experts believe that whilst this move may offer certainty, many borrowers may see their
rates rise.
David Black, head of banking at Defaqto, said: “We have a bank base rate which is currently at the
bottom of its cycle so any changes in it in the immediate future are only likely to be upwards. An
obvious upside is that cash advances will bear the same interest rate as other non- introductory rate
transactions.”
