Halifax reduces cardholders' costs

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The Independent Online
HALIFAX Building Society has joined Lloyds Bank and the John Lewis Partnership in cutting the interest rate on its credit card - in this case from a 27.8 annual percentage rate to 25.8 per cent, writes Maria Scott.

The Halifax cut follows an increase in the cost of the society's card last January at a time when the general trend in interest rates was downwards.

A number of other credit card operators - including TSB, Barclays and National Westminster - are also looking again at their interest rates. But the plastic card industry cannot be accused of acting with indecent haste in cutting rates.

Store cards - with the exception of John Lewis and its 19.5 per cent APR - stand out more than ever for their high rates. With the base rate at 9 per cent some of the 130,000 holders of Littlewoods store cards are still paying more than four times this.

Cardholders are charged no interest if they clear their bills, but otherwise the APR is 38.4 per cent unless they pay the minimum bill by direct debit. This brings the cost down to 32.4 per cent.

John Allan, managing director of CDMS, the Littlewoods division that runs the company's store card, is not promising any early change.

'The cost of funding is only a small element of the cost of running the card,' he said.

CDMS also runs cards for a variety of other retailers including Oddbins, Iceland Frozen Foods, Do-It-All and River Island. The rates on the cards vary, but none is below 30 per cent.

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