Now if this isn't usury, I don't know what is.
[font=arial,helvetica,sans-serif]Up to 70% interest - credit card aimed at the poor[/font]
[font=Geneva,Arial,sans-serif] Patrick Collinson
Saturday February 12, 2005
The Guardian
[/font] [font=Geneva,Arial,sans-serif]A new credit card aimed at millions of low-income families is to charge interest at up to 70% - the highest ever charged by a credit card company. [/font] [font=Geneva,Arial,sans-serif]Marketed under the slogan: "Stay in control of your budgeting", the typical interest rate on the new Vanquis card will be 49.9%, but for some customers the company judge as high risk, it will be 69.5%. MPs and debt campaigners yesterday condemned the rate, which is 15 times the Bank of England base rate and triple the standard rate on other cards. The card also has an annual fee of £19. [/font]
[font=Geneva,Arial,sans-serif]Norman Lamb, Liberal Democrat MP for North Norfolk, who recently completed a Treasury select committee investigation into credit cards, called the rate "staggeringly high". He added: "People on a low income tempted by it need to be given a clear financial health warning." Debt on our Doorstep, an umbrella group that includes Oxfam, credit unions and Church Action on Poverty, said: "It's an absolute disgrace that Vanquis should even be suggesting people borrow money on a credit card at that rate." [/font]
[font=Geneva,Arial,sans-serif]Vanquis is a subsidiary of Provident Financial, the biggest doorstep lender in the country, and is the subject of an industry-wide investigation by the Competition Commission into the home credit market. [/font]
[font=Geneva,Arial,sans-serif]To find customers, Vanquis will trawl through the files of private credit rating agency Experian - it holds data on almost everyone in Britain - to identify individuals rejected by other lenders often because they have run into debt problems in the past.
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[font=Geneva,Arial,sans-serif]It expects the typical customer to have an income of half the national average. Provident Financial's executive directors last year earned from £376,000 to £583,000, while the chief executive saw his pension fund rise from £916,000 to £1.3m. [/font]
[font=Geneva,Arial,sans-serif]Vanquis managing director Les Stillwell yesterday defended the national launch of the card, which was successfully piloted in part of Scotland last year. He said: "The big problem with credit card lending is not the interest rate but the amount of credit that is granted. We are only looking at that part of the market where we can lend responsibly. [/font]
[font=Geneva,Arial,sans-serif]"People will have to have an income of at least £5,000 a year, and will be given a credit limit starting at just £150. If they keep their payments up, the rate will be reviewed, typically falling by 3-4% a year." [/font]
[font=Geneva,Arial,sans-serif]But Debt on our Doorstep said it will now increase pressure on the government to amend the consumer credit bill to include a clause allowing the government to impose a maximum interest rate cap.
http://money.guardian.co.uk/news_/story/0,1456,1411444,00.html
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[font=arial,helvetica,sans-serif]Up to 70% interest - credit card aimed at the poor[/font]
[font=Geneva,Arial,sans-serif] Patrick Collinson
Saturday February 12, 2005
The Guardian
[/font] [font=Geneva,Arial,sans-serif]A new credit card aimed at millions of low-income families is to charge interest at up to 70% - the highest ever charged by a credit card company. [/font] [font=Geneva,Arial,sans-serif]Marketed under the slogan: "Stay in control of your budgeting", the typical interest rate on the new Vanquis card will be 49.9%, but for some customers the company judge as high risk, it will be 69.5%. MPs and debt campaigners yesterday condemned the rate, which is 15 times the Bank of England base rate and triple the standard rate on other cards. The card also has an annual fee of £19. [/font]
[font=Geneva,Arial,sans-serif]Norman Lamb, Liberal Democrat MP for North Norfolk, who recently completed a Treasury select committee investigation into credit cards, called the rate "staggeringly high". He added: "People on a low income tempted by it need to be given a clear financial health warning." Debt on our Doorstep, an umbrella group that includes Oxfam, credit unions and Church Action on Poverty, said: "It's an absolute disgrace that Vanquis should even be suggesting people borrow money on a credit card at that rate." [/font]
[font=Geneva,Arial,sans-serif]Vanquis is a subsidiary of Provident Financial, the biggest doorstep lender in the country, and is the subject of an industry-wide investigation by the Competition Commission into the home credit market. [/font]
[font=Geneva,Arial,sans-serif]To find customers, Vanquis will trawl through the files of private credit rating agency Experian - it holds data on almost everyone in Britain - to identify individuals rejected by other lenders often because they have run into debt problems in the past.
[/font]
[font=Geneva,Arial,sans-serif]It expects the typical customer to have an income of half the national average. Provident Financial's executive directors last year earned from £376,000 to £583,000, while the chief executive saw his pension fund rise from £916,000 to £1.3m. [/font]
[font=Geneva,Arial,sans-serif]Vanquis managing director Les Stillwell yesterday defended the national launch of the card, which was successfully piloted in part of Scotland last year. He said: "The big problem with credit card lending is not the interest rate but the amount of credit that is granted. We are only looking at that part of the market where we can lend responsibly. [/font]
[font=Geneva,Arial,sans-serif]"People will have to have an income of at least £5,000 a year, and will be given a credit limit starting at just £150. If they keep their payments up, the rate will be reviewed, typically falling by 3-4% a year." [/font]
[font=Geneva,Arial,sans-serif]But Debt on our Doorstep said it will now increase pressure on the government to amend the consumer credit bill to include a clause allowing the government to impose a maximum interest rate cap.
http://money.guardian.co.uk/news_/story/0,1456,1411444,00.html
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