Major bank with nearly 2million customers to HIKE credit card interest rates in weeks despite borrowing costs falling
Major bank with nearly 2million customers to HIKE credit card interest rates in weeks despite borrowing costs falling
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A MAJOR bank with nearly two million customers is hiking credit card fees in weeks. First Direct, the branchless subsidiary of HSBC, will increase the interest rates offered on credit card purchases, balance transfers and cash withdrawals on April 15. The annual percentage rate (APR) for purchases will jump from 19.9% to 24.9%, adding an extra £0.35 per month for every £100 owed.
![[Laptop displaying First Direct bank website update announcement.]](https://www.thesun.co.uk/wp-content/uploads/2025/01/editorial-use-920789446_d9917b.jpg?strip=all&w=960)
The same increases will apply to balance transfers and money transfers. Cash transactions will see a slightly larger increase. The APR charged for those making cash or cash-related payments including withdrawals will rise from 24.7% to 29.7%, costing an additional £0.33 per month for every £100.
If you consistently pay your balance in full each month, this change won't affect you. Customers can continue to enjoy up to 56 days of interest-free credit on purchases. Existing promotional rates will also remain unaffected until their expiry date, provided minimum payments are met.
However, if you carry a balance, these increases will lead to higher interest charges. Customers unhappy with the changes can close their accounts without penalty before April 11 and repay their existing balance at the current rate. After this date, the new rates will apply.
Alastair Douglas, chief executive of TotallyMoney said: "Although interest rates are expected to come down this year, as the government pushes the Bank of England to help grow the economy, there's a good chance that we might not see like-for-like benefits being passed on to consumers.
