Sunday, January 07, 2007

According to the BBC, although HSBC customers will now immediately pay
interest of between 21.9% and 27.8% instead of the previous charge of
between 15.9% and 22.9%, they will not be charged the one-off fee applied to
other cash transactions such as the purchase of foreign currency.
AdvertisementThe BBC reported that, in the last year, all major banks have
protested about increasing numbers of bad loans within their credit card
businesses. It commented, however, that HSBC's decision has not come as a
result of fears that customers who use their credit cards to gamble are more
likely to amass debt that they cannot pay.
The HSBC spokeswoman told the BBC: "We have not seen that as part of our
customers' behavior." Instead, she stated: "This is one of a number of
changes we have made to our credit card offering recently to bring us in
line with the competition." At present, the UK credit card industry does not
have a standard policy regarding gambling charges. While Barclaycard and
Lloyds charge at their lower purchase rates, MBNA, Royal Bank of Scotland
and Egg charge at the cash advance rate. According to the BBC, there is,
however, a loophole in HSBC's strategy as payments that are channeled via
the online payment service Paypal will still be charged as a retail purchase
and therefore continue to attract a lower rate of interest. According to the
Association of Payment Clearing Services, credit card gambling carried out
by UK consumers in the year up to June 2006 accounted for just 0.8% of all
credit card spending