Provident's Credit Card comes in for criticism....
14th October 2003
Interest rates of over 50%...
Sunday's Moneybox programme highlighted the movement of Provident into the credit card "market". As ever, the target is people on low incomes and the interest rates are high - in this case over 50%. Provident claim that these interest rates reflect the risk of default posed by their customers, but this is unlikely given that other "sub-prime" credit cards exist at much lower rates.
As more mainstream lenders have been forced to shed annual fees for credit cards, Provident's card, provided through Vanquis Bank, has an annual fee of £19 and an initial interest rate of 58.1%. Interest rates reduce as the level of borrowing increases, but the lowest rate is 26.6% and to obtain this you have to run up a limit of £2000 - presumably only available to people that have demonstrated themselves as good payers.
