How should credit card companies keep customers?

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BBC, Last Updated: Monday, 1 November, 2004

People who continually switch between 0% finance deals to keep their credit card debts interest-free are costing the industry around £1bn a year.

According to PricewaterhouseCoopers (PwC), companies will try to retain the so-called "rate tarts" as customers by reducing their standard interest rates.

The PwC study also predicts within a few years the number of adults holding a credit card in the UK will increase to around 73% of the population.

Are you a "rate-tart" and regularly switch credit cards?
Will you remain with one company if they drop interest rates?
How should credit card companies try to keep customers?
Send us your comments.

The following comments reflect the balance of opinion we have received so far:

Pay your debts and stop borrowing

Derran, Wales

I was a credit tart until one day I found that switching wasn't working because I ended up spending more money because I had more cards. This went on until there was no turning back and now because of my stupidity I have no credit. Lesson is, pay your debts and stop borrowing. They may be your cards but it's not your money.
Derran, Wales

Make the credit card companies money work for YOU! I take the 0% balance transfers from my credit card companies and stick it in my offset mortgage account. The effect of this is that the credit card companies are unknowingly paying HALF of the interest on my mortgage for 9 months at a time. Wonderful! And the last time I applied a got a free return flight to Europe thrown in too...
Cliff, Edinburgh, UK

I find this hilarious. Dodgy practices by various corporations cost consumers billions each year and nobody bats an eyelid. When the consumer gets wise to the ways and finds a way to get one over on the credit card companies, they cry foul. Something afoot here.
Darryl LeCount, Paderborn, Germany

The card companies only have themselves to blame

Keith, Sunderland, UK

It was a stupid idea from day one, but the card companies only have themselves to blame. If they are prepared to foot the bill who are we to argue? What I will not do is subsidise it myself. If prices are increased to cover the use of a card then I for one will simply revert back to cash.
Keith, Sunderland, UK

People will continue to shop around for the best rates because it is more cost effective. The finance community does not reward "loyalty" from customers who stay with them, therefore you have to continue to switch to get the best rates going. This applies to mortgages also where you have to keep moving for the best rates. If at some point there actually is some loyalty from the banks etc for their existing customers, then maybe they might get customers to stay with them who otherwise like me move around the market. I won't hold my breath on this one though!!
Pete, Plymouth, England

Rate Tarts are messing up their credit ratings by applying for so many cards. Each application is recorded by the major credit rating firms. This kind of dodgy-looking profile may count against them one day when it really matters. Things are not always as straightforward as they seem. There is no free lunch!
James, London

Crikey, these 'rate tarts' must be an odd breed of person. What is the world coming to when people don't want to give all of their money away to the credit card companies and actually use their rights as a consumer to get the best deal! Disgusting!
Evan, Edinburgh

They are forced to use credit cards to survive

Penny, USA

The term "rate-tart" is derogatory to those who are consumer savvy. Many of my elderly friends don't earn enough to live on their limited income (and their families forget they are even alive and in need) and so, they are forced to use credit cards to survive (they purchase needs not wants). They do transfer credit card balances to gain the best rate and I say "good for them". The best course of action is to pay off the balance at month end and not spend more than you can pay off at month end.
Penny, USA

I have also been doing this for years now. Have literally saved hundreds and hundreds. In fact I am now on my second time around with some companies! Some will instantly give a £15k cash advance at 0% for 9 months, it's great. I'll settle down when one company agrees to match the best that any of the others can offer.
Mark Cary, Stevenage

These schemers seem a bit slow on the uptake if they've only just twigged. Suggest they reduce their marketing budgets which must run into billions, stop sending the junk-lower rates across the board.
Julia, Manchester

Simple: low rates, good customer service and not feeling the need to threaten sending the boys round when you miss out on a payment of 2p.
Ed, London

I can tell you how to lose customers. I have a Natwest card, they offer an introductory rate to new customers. When I asked if I could have the introductory rate as I'd been a loyal customer they said no. Hence I applied for a Capital One card and transferred the balance off the Natwest card the next day.
Giles Clinker, London, UK

Costing them £1b a year? About time too

Shant Narsesian, Amersham

Costing them £1b a year? About time too. How much interest have they charged us over the years? 25.9% APR? The credit card companies have as many financial problems as Bill Gates. Besides, let's face it, they're not offering us 0% to do us a favour. They're just fighting each other for market share... and long may it continue!
Shant Narsesian, Amersham

As a 'Rate tart' I haven't paid any interest on my cards for years now. The only problem for me is trying to remember which credit card companies I have used in the past when I need to apply for a new one !!
Graeme Sewell, London, England

If I wanted I could be a rate tart to the sum of £10k. Using O% accounts to finance a savings account is are great way to make a ROI with someone else's money.
Andrew Hirst, Loughbrough

Offer decent rates in the first place instead of hooking people in with zero interest at the start then fleecing them later on down the line.
Rich, London, UK

I wish I was a 'rate tart'

Rachel, London

I wish I was a 'rate tart'. My credit card company have just charged me £6 interest on a balance of £42 and refuse to admit they were wrong. I certainly won't be making that mistake again!
Rachel, London

A credit card company phoned me up and offered me a six month interest free loan for over £10K paid directly into my back account fee free which I accepted and offset against my mortgage, how can they possibly complain? Are they actually complaining that their sale will not encourage me to spend beyond my means and force me to pay their extortionate interest rates? Is that ethical?
Paul, London

By offering the customers a decent product. Unfortunately the companies just exploit the people who stay with them whilst pursuing new customers. In short they don't give people a reason to be loyal, they force people down this route.
Rich, St Albans, UK

I am proud to be a rate tart it's about time the public got some benefits from the greedy banks. If they weren't so greedy for extra profits and customers the situation wouldn't arise. As soon as free credit disappears I will pay off my debt. Lower interest rates won't tempt me.
Lol, Preston, Lancs.

I'm a "rate tart" and proud of it. There nothing wrong with sticking to the terms and conditions published with each credit card. If the 0% rates are available, why not use them? A lot of rate tarts (like myself) are not switching debt around but putting the money borrowed at 0% into high interest accounts and making money out of the credit card companies. More fool them I say!
Mike Jones, Maidenhead, Berkshire

The way you keep customers is to give them a reason to stay loyal. If, for example, credit card companies offered gradually reducing interest rates for long-term customers, this would give people a reason for staying with one company.
David Hazel, Fareham, UK

It's good to know that there are so may of us so called 'Rate-Tarts' around. Credit Card firms make millions on extortionate interest rates and charges that it is a pleasure to hear that so many people are taking advantage of this loophole. Long may it continue!!
Lee Clark, Maidenhead UK

Credit card interest rates should be regulated

Dee, Reigate

Credit card interest rates should be regulated. There is no reason why we should pay 15.9% when the base rate is 4.75%. I will continue to look for the best deal available.
Dee, Reigate

This may sound like slightly revolutionary thinking, but how about offering decent interest rates to start with, instead of trying to rip customers off? Then people may be more inclined to stay with one company.
Will , Henley, UK

I'm a rate tart and will take advantage of these offers for as long as is possible. At the end of the day, banks will try and bleed money out of me any way they can, so I might as well play whatever advantages are available to me.
Beck, Cardiff

I'm sorry, but we are supposed to tell the credit card companies how to get more money out of us, I don't think so! My heart bleeds, not!
Brian, Scotland

I always pay my card in full every month so I don't care what interest rate they charge. I don't subscribe to third-party loyalty point schemes for reasons of personal privacy so I don't care about those either. I've been with the same card provider since 1995 because their customer service department operates 24x7 and they are actually helpful, unlike certain card providers I could mention.
John B, UK

I have over £30,000 of money from 0% offers sitting in a high-rate bank account. I pay all the minimum payments each month, and pay the full balance off from the savings when the 0% term runs out. I make around £80-£100 per month in interest, which pays for a meal out with wine every week or two. Thanks, credit card companies!
John Bratby,

If they don't like it, they shouldn't offer the deal

Fletcher, Poole, UK

If the rate stays at zero percent, I would stay with one company. If I can get cheaper elsewhere I will move. That's common sense. If they don't like it, they shouldn't offer the deal.
Fletcher, Poole, UK

I won't shed too many tears for the credit card industry - after all, they must have destroyed about 1 billion trees to create the junk that they shove through my letter box all the time. A credit card has its uses but not as a way of financing debt, 0% or otherwise. If you want something that much then save up for it. You might even find that by the time you have the cash for it, you don't actually want it after all.
Ian, UK

Yes I am a rate tart. I had an outstanding balance on my credit card, I approached my bank and asked them if they would be willing to either lower my interest rate or provide a 0% interest free period. There answer was a flat refusal. If credit card providers will not be flexible and encourage their customers to remain loyal then why will they when they can get a better deal elsewhere? By removing the 0% interest attraction people will still just switch between the cards providing the lower interest rates.
Andy, Brighton, Uk

As a confirmed rate tart I would only stay with a credit card company if they offer a reduced rate of interest for the lifetime of the balance. Once my balance is paid off I'll be searching for the best loyalty scheme (something most of the credit card companies seem to have cut back on recently)
Fiona, Dumbarton

If credit card companies choose to: a) make it possible to switch between cards and take advantage of a zero rate; and b) insist on keeping their interest rates high whether or not the underlying interest rate changes then they deserve to lose the £1billion a year. Customers are not so much "rate tarts" as disaffected by credit card companies profiteering. What is likely to happen is that credit card companies will restrict the ability of customers to switch between cards but will not pass on any savings that they make by lowering interest rates.
Gareth, UK

After spending time in Hong Kong, I find the credit situation in UK to be ridiculous. In HK, EVERYTHING can be bought on credit (even a hair cut) and paid back in instalments ... All at ZERO percent. The credit companies in this country are making a bundle at your expense! It's a complete swindle!
Will, Glasgow

What they give with one hand they take with the other. For every 0% deal there's a £20 late payment fine (and isn't it funny how statements fail to turn up more often since those fines were introduced?)
Ray Gray, London, England

Credit cards only offer 0% deals to trick people into paying interest once the deal has ended. It's just a shame for the intelligent people who take up their kind offer of free credit that they're going to stop the deals. They'll have to dream up some other way of extracting cash from us - no doubt we'll find some way round it...
Andrea, England

I have been a "rate-tart" in my time but have stayed with my current visa provider (a well known supermarket chain) for some years because their apr is competitive. However, I recently had a problem with the interest calculation on one of their monthly statements and in spite of being promised by the staff at the call centre three times that they would send me a written breakdown of the calculation (which they stated was correct), I have yet to receive the promised document. Working in a service industry myself, I can not stand poor service and so will look to change my credit card provider in the near future.
Alison, UK

These company's are just deriding people for playing them at their own game

Clare, Buxton, Derbys

I switch credit cards regularly to benefit from 0% interest, but object to being called a 'rate tart'. It makes sound economic sense to search out the cheapest form of borrowing, so these company's are just deriding people for playing them at their own game; remember when they called us 'carpet-baggers' for opening accounts to gain from windfalls?!
Clare, Buxton, Derbys

Boo Hoo! The credit card companies are getting upset because savvy consumers are playing them at their own game. When you hear about the obscene profits made by the banks and credit card companies at the expense of the public, it's hard to feel any sympathy for their bleating. Unfortunately it will once again be the consumer who loses out as these offers disappear, due to corporate greed.
Kim, Aberdeen, UK

Credit card companies are out to make money from customers. I don't see what's wrong with that. So, if you don't like paying excessive amounts of interest then don't get a credit card or don't spend more than you can afford. It's not rocket science...
Peter Alsop, Calne, Wiltshire

I have been a rate tart for a few years and it's been great

Richard Read, London, UK

I have been a rate tart for a few years and it's been great. I don't use my credit cards very much but when I do I pay very little interest. It was only a matter of time though before the credit card companies clamped down, so I'm glad that I enjoyed it while I could.
Richard Read, London, UK

I have no sympathy for those who have run up mass debt by switching credit cards in some vain hope of paying it later (unless they had no other choice due to extreme circumstances). About time people learned about responsibilities and spending what they can afford. If you want to spend more than you earn, get a better job.
David, UK

I don't swap cards to receive a better rate mainly because I would never get through the credit check. However, I do feel that companies should try doing something for existing customers - reduced/zero rates for new customers are great but what about doing the same for a period of time for existing customers.
Sarah, Chester, UK

I don't think companies should be allowed to offer 0% interest

Emma, Leeds

Considering the amount of debt we owe as a nation, I don't think companies should be allowed to offer 0% interest. It just makes people get into debt. One of my friends transfers her full balance every month from one card to another just to avoid having to make the minimum payments!!
Emma, Leeds

I've had a poor credit rating in the past, and I've noticed a few companies have started offering me cards again, but when I apply, the rate they offer is around the 35% mark. So I have two of these, but I make sure they don't make one penny out of me by paying in full every month.
Andy Roberts, Southend-on-Sea, Essex UK

With just one small recession, hundreds of thousands could end up bankrupt and the economy - based on fake consumer spending - would suffer. It is far healthier to only spend money that is actually yours. Credit is a mugs game and the only winners are the bloodsucking card companies.
Mick Deal, Milton Keynes, UK

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