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Last Updated: Tuesday, 20 April, 2004, 08:58 GMT 09:58 UK
Have Your Say
Interest rates can be high if your credit rating is poor
We are keen to hear your thoughts following our investigation into The Price of Poverty.

If you have a comment to make please use the e-mail form below.

Do you find it difficult to get credit? Are you charged high interest rates?

Should there be a cap on interest rates charged? Or should lenders be able to set whatever rate they choose?


I got a flyer through the letterbox asking if I wanted a credit card with an APR of 55%! It would be funny if it was not for the fact that there really is a lot of people in the desperate situation of having to go to such sharks.
William

While I am loath to defend these lenders, given that they lend unsecured money to people on low incomes and benefits, who have very poor (or no) credit histories, perhaps those rates are not out of line.

A relevant question to have asked would have been: what is your rate of loss due to fraud and write-offs? That is a strong determinant of the rate charged. I suspect it is very high and another reason to justify the high rates.

The only other alternative that many of these people have is street lenders, who would charge an even higher rate of interest. And if you cannot pay them they might break your limbs.
Roger Marsh

Lending, and the increasing cost of borrowing is what allows prices to rise above what people can afford.

It is shameful to make money itself more expensive to people who have so little
Jeremy Ireland

Businesses are only able to charge above what people can afford because of credit, otherwise there would simply be nowhere else to get the money from, the perfect example being houses. If it was illegal to spend borrowed money on houses, then house prices would fall overnight, to the average level of savings.

We pay banks over and over for their debt, and they know it.
Jeffrey Smith

Many people in the UK are paying more to banks than they are to the government in taxes for services. This money could be used by poor people to obtain qualifications, eat better, and make choices.

If, say a petrol company charged 10 times the amount to the poor as it does to the average customer, they would be prosecuted, surely? Why not so with banks?

It is shameful to make money itself more expensive to people who have so little.
Jeremy Ireland

Here is a nice little example of the price of poverty: a platinum card helpline which has a freephone number, yet the standard card from the same provider has an 0870 national rate line.
Frank Sobey

I think that lenders should be more transparent about what they charge. Their 'typical APR' is often not what their customers are charged.

This makes comparing different lenders' rates difficult as they only advertise their so-called typical rate.

They should at least advertise the range of their rates, or the lowest and highest that half their customers get (the interquartile range).

Maybe lenders should only be allowed to charge one rate. Though I appreciate this would cause all rates to increase and could make it harder for those who would have normally only got the higher rates to get anything.
John Snow

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Disclaimer: The BBC may edit your comments and cannot guarantee that all e-mails will be published.

The comments we publish are not necessarily the views of the BBC but will reflect the balance of views we have received. It is helpful if contributors state if they work for any organisation relevant to an issue discussed. Readers should form their own views on whether messages published represent undeclared interests, or views prompted by a common source.

Money Box Investigates: The Price of Poverty was broadcast on Tuesday, 20 April, 2004, at 2002 BST.

The programme was repeated on Sunday, 25 April, 2004, at 1702 BST.

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SEE ALSO:
The Price of Poverty
13 Apr 04  |  Moneybox
Interest rates: Does a cap fit?
20 Apr 04  |  Moneybox
Internet links
20 Apr 04  |  Moneybox


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