Tuesday, October 04, 2005

Thinking inside the box

Why are MPs getting in a flap about Barclaycard raising it's interest rates by 2%?

It is a private company operating in a highly competitive market and it's operational decisions have nothing to do with MPs. If high levels of consumer debt and the potential level for bad debts concern Barclaycard's senior management team, they should be allowed to increase the cost of debt.

Rate tarts will move their borrowing elsewhere, only high risk borrowers will remain. As 73% of people pay their credit card balances in full each month, the interest rate increase will not affect most people anyway.

MPs would be better advised to spend their time worrying about limiting council tax increases, something their electorates are unable to avoid.

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