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Rod McPhee: Bitten by card sharks
THIS week my credit card company wrote to inform me they were raising my interest rate from just under 17 per cent to almost 24 per cent.
"The significant downturn in the economy," they explained. "means it's costing us more to lend, which has made it necessary for us to review our customers' accounts. As part of this review we've taken the decision to increase some of our rates."
Which is nice of them, isn't it?
I realise this is an old-fashioned approach, but when you form an agreement with someone you kind of expect them to stick to it. Crazy, I know.
Granted, these companies always write into the small print they reserve the right to withdraw and amend offers and rates, but you still don't imagine they'll actually do it.
You'd imagine that – in the name of fairness and, heck, just decency and credibility – they wouldn't unilaterally change their mind.
"To give you extra time to understand and budget," the letter continued, "these changes won't take effect until after your March 2010 statment."
Actually I can understand now, thanks. I understand that you're mercilessly ripping me off. What I can't do is 'budget' in order to magically produce the hundreds of extra pounds a year that these changes will cost me.
Imagine if your bank suddenly did the same thing with your mortgage, or your utility providers, or your local authority suddenly increased your council tax by 40 per cent. There'd be uproar.
Just for the record, my rate-jacking wasn't some kind of punishment for being a bad customer. I've never made a late payment or gone over my limit, plus I have a direct debit set up to make sure a set amount goes towards reducing the balance every month.
A quick check online saw me discover all kinds of horror stories which made me realise I'd got off relatively lightly.
Many, with a similarly good credit rating to myself, saw their rates go up by close to 120 per cent with a selection of poor souls suddenly finding they were paying almost 35 PER CENT where they'd previously been charged a fraction of that.
Of course, these web forum stories can't always be verified, but I wonder how many people reading this are in the same situation? And I wonder how many thought they were alone?
What's particularly shocking is that these financial institutions are now clearly trying to recoup money lost due to bad borrowers. But it's madness and grossly unfair to penalise those borrowers who manage their debts in a responsible way.
It's also counterproductive and could see some people, previously coping with repayments, find themselves facing bankruptcy. How can that make sense? How is that 'responsible lending'?
Isn't that just dragging everyone down to the same desperate level in order to maximise the profits of the money men who got us into this mess in the first place? After all, some of the lenders pushing up these rates are the big high street banks.
And any positive impact of reducing VAT, reducing interest rates, and all the other measures taken by Brown and Darling could be completely negated by whacking ordinary Briton's – millions of whom own credit cards – with unscrupulopus rate-jacking.
What is going on quietly, piecemeal, through a letter here and a letter there, is a national scandal. It amounts to extortion at a time when we should be being cut some slack, not fleeced.
Ministers have already held talks with lenders about this issue with no concrete agreements to protect borrowers. So, let's see what more, if anything, the government does to tackle this.
And to those who, like me, didn't think they were a candidate for rate hikes, remember: they don't always write to forewarn you so check your statement. You might already be paying through the nose without realising it.
Too little, too late
HOW brave of John Battle and Colin Burgon to highlight the problems of poverty and unemployment in Leeds – just as they prepare to step down as two of the city's MPs.
Perhaps it might have been better to take a stand on these issues when they were actually in a position to do something about them, being as they are members of the party which has been in government for the last 13 years.
But of course speaking up meant stepping out of line and being more than backbench fodder, and they were never going to risk that. So, like kids blowing a raspberry at their dad before running away, they do it now, just as they're about to exit public life. It amounts to a cheap parting shot.
I always thought politicians should highlight contentious issues when entering parliament, not leaving it.
Nightlife dies a death
IT was sad to see one of Leeds's biggest nights, Glasshouse, wave goodbye to the city last weekend.
For 13 years now it has been a mainstay of the local club scene and its passing marks the end of a golden period of nightlife for generations.
We've lost Speed Queen at The Warehouse, Federation at Victoria Works, then Glasshouse goes – and the uncom-fortable truth is that there don't seem to be many new clubs of a similar calibre ready to replace the old masters.
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Weather for Leeds
Sunday 12 February 2012
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Cloudy
Temperature: 0 C to 5 C
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Wind direction: North west
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