Spotlight On: Halifax credit cards

The deal

Halifax is moving its 5m credit card holders to a new personal rate from August.

The good points

The interest rate will be the same whether the card is used for purchases or cash withdrawals.

The bad points

The rate will be set according to the average rate charged in the first three months of the year. So anyone repaying interest on a cash withdrawal will end up with a higher rate than those who only used their card for purchases. On top of that will be added the Base Rate. While that now stands at 0.5 per cent, it can only go up, meaning interest charges will quickly rise for anyone who uses their card from August onwards.

Conclusion

The bank claims it is making things simpler for customers. But it hasn't cut credit card charges since the Base Rate fell from around 5 per cent. Now it proposes to increase charges when the rate rises. That seems unfair and is as good a reason I can think of to switch to another plastic card issuer.