Millions miss out on reduced interest rates

Money website Fool.co.uk acknowledges the move by credit-card companies to "play fair" with customers. But many customers are still missing out on lower interest rates on their credit because they think Annual Percentage Rates (APRs) are set in stone.

A quarter (25%) don't know how much interest they pay on their credit cards or loans
Three out of four (76%) are unaware you can haggle over these interest rates
One in eight (13%) has tried to negotiate APRs with their lenders

Bargaining in shops is fairly widespread. But money website Fool.co.uk reveals that three quarters of us (76%) are not aware that it is possible to negotiate better interest rates on credit cards and loans too. In other words, 27 million people may be on higher interest rates than necessary.

While one in four (24%) people know that APRs are negotiable, only one in eight (13%) customers has attempted to get a competitive rate. And one in ten (10%) has succeeded in doing so. Elsewhere, one in four people (25%) does not know how much interest they pay, even though typical credit-card rates are around 16.5%.

David Kuo, financial expert at Fool.co.uk says: "Credit card providers have done a great job peddling the idea that the interest rates they charge are one of the unchangeable facts of finance.

"Consequently, many people believe that the interest rates they are offered cannot be altered. But nothing could be further from the truth.

"The recent move by the Department for Business Enterprise & Regulatory Reform to impose a new set of fair principles is nothing more than pointless foot stamping by another Government division.

"If you always pay off your credit card balances in full, then APRs are irrelevant. But if you don't, then you are probably paying more than you need to.

"If you are unhappy with the interest rate you are paying then it can't hurt to ask for a better one. If you don't ask, how do you know you won't get it? The worst thing that can happen is that they say no."