Debt charities have called for a cap on lending rates after the
launch of a credit card aimed at low-income families that charges
interest at rates of up to 70 per cent.
Debt On Our Doorstep, an umbrella group that includes Oxfam and
Church Action on Poverty, has described the Vanquis credit card as
a “disgrace” and called for an interest rate ceiling of 30 per cent
for all cards.
It has launched a Curb the Credit Sharks campaign with the Sunday
Mirror, and is urging people to raise the capping issue with their
MPs before the Consumer Credit Bill returns to parliament next
The new card, issued by Provident Financial, typically offers an
APR interest rate of 49.9 per cent. But for customers judged to be
high risk, this will rise to 69.5 per cent.
Provident Financial said the cards were for people who might have
had financial problems in the past or had modest incomes and that
their rates had to reflect this. Rates of interest would be
reviewed after 12 months.
But the Joseph Rowntree Foundation warned that tackling high-cost
lending could reduce access to credit for poorer people. It has
called on the government to invest in discretionary interest-free
loans through the social fund and provide more support for credit
- Affordable Credit: The Way Forward at www.jrf.org.uk