Punitive rate rises for RBS cardholders

State-owned bank criticised for treatment of credit card customers

Royal Bank of Scotland has imposed massive hikes in interest rate charges for credit cards used by millions of borrowers, a survey shows today.

RBS, Natwest and Mint cards owned by the RBS Group – which the Government controls – raised their APR from 12.9 per cent to 16.9 per cent in the 12 months to February, a rise of 31 per cent.

The bank increased the rates despite large falls in inflation. In the year to February the Bank of England base rate fell from 5.25 per cent to 1 per cent and now stands at 0.5 per cent. The Retail Price Index fell 0.4 per cent last month, the first time prices have gone into reverse for almost 50 years.

The consumer group Which?, authors of the survey, accused card companies of being "out of touch with reality". It found that 28 providers of widely held credit cards had either increased interest rates or other charges, reduced the number of days to pay or reduced the number of interest-free days over the last year.

On average, credit card rates rose by 0.5 per cent from 16.2 per cent APR to 16.7 per cent APR. However, there many cases where companies with millions of customers had put up rates by far more. The publicly owned Post Office has put its rates up by 3 percentage points to 19.9 per cent – a hike of 18 per cent.

The Master Card APR from Halifax/Bank of Scotland leapt from 9.9 per cent to 15.9 per cent, a rise of 60 per cent, though it is still cheaper than many rivals. Other companies have left their headline APR alone but put rates up for their existing customers. Egg, for instance, recently put its rates up for half a million of its customers by up to 7 percentage points

The moves come despite a credit card summit held by the Government last year at which 13 leading providers – including RBS Group – agreed to be more sensitive to consumers during the credit crunch.

The Prime Minister Gordon Brown called the summit after The Independent disclosed on 11 November that credit card providers had increased rates by 0.4 percentage points to 17.6 per cent despite falls in the Bank of England base rate.

The Liberal Democrat Treasury spokesman Lord Oakeshott said: "The new bosses at RBS are fast learners in the Fred Goodwin school of greed. These taxpayer-owned banks must stop spanking their credit card customers. Paying these extortionate interest rates in the high teens destroys your financial health just like 50 cigarettes a day or 50 drinks a week. People should pay their credit card debts off for good as soon as they can."

Which? advised customers to shop around for good deals, saying that someone borrowing £1,000 over a year could save £70 by taking out a cheaper card.

During its investigation for the May issue of Which? Money, the consumer group found what it described as "a big squeeze" on rates and other conditions.

Both MBNA and Alliance & Leicester have reduced the number of interest-free days and days to pay on cards. Only eight companies still offer cashback cards – less than half of those available two years ago. Some have also cut the amount of cashback available.

Many providers have put up balance transfer fees over the year, Which? complained. Ulster Bank increased its introductory balance transfer rate from 0 per cent to 4.95 per cent and also introduced a transfer fee of 2.9 per cent to its introductory offer on two credit cards.

In a statement RBS said: "Any adjustments we have made to our credit card rates over the last 12 months have simply brought us in line with our competitors. Any customer experiencing difficulty with repayments should look to contact us immediately so we can look to help them with alternative arrangements. We also provide up to 60 days' breathing space for customers struggling to meet their monthly repayments."

FootballGerman sparks three goals in four minutes at favourite No 10 role
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
A long jumper competes in the 80-to-84-year-old age division at the 2007 World Masters Championships
Radamel Falcao was forced to withdraw from the World Cup after undergoing surgery
premier leagueExclusive: Reds have agreement with Monaco
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
Life and Style
Walking tall: unlike some, Donatella Versace showed a strong and vibrant collection
fashionAlexander Fury on the staid Italian clothing industry
Arts and Entertainment
Gregory Porter learnt about his father’s voice at his funeral
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Life and Style
Children at the Leytonstone branch of the Homeless Children's Aid and Adoption Society tuck into their harvest festival gifts, in October 1936
food + drinkThe harvest festival is back, but forget cans of tuna and packets of instant mash
New Articles
i100... she's just started school
ebooksAn unforgettable anthology of contemporary reportage
New Articles
Life and Style
Couples have been having sex less in 2014, according to a new survey
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
New Articles
i100... despite rising prices
Holly's review of Peterborough's Pizza Express quickly went viral on social media
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam