Halifax, a part of Lloyds Banking Group, has warned customers that the cost of their borrowings will rise with the increase in Bank of England interest rates.
Currently, the representative yearly interest rates on Halifax’s credit cards range between 12.9% and 19.9% APR, which is 26-40 times the 0.5% base rate.
If the base rate increases, cardholders will be forced to bear the cost, claims Halifax. The new rate will be placed on the last working day of the same month in which the base rate changes.
If the UK central bank increases its base rate by 0.25%, the Halifax credit card interest rate will also be up by 0.25% by the end of the month.
Halifax spokesman was quoted by The Guardian as saying that the notification letter was sent to all Halifax and Bank of Scotland credit card customers whose standard annual interest rates are linked to the base rate.
"Any changes to customers’ standard annual interest rate as a result of change in the base rate are effective from the date the customer receives their next statement," spokesman added.