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The great interest rate ripoff
A Kipp survey has found that UAE credit card customers pay twice as much interest compared with their UK counterparts. With the row over Mashreqbank’s mortgage rates escalating, we ask whether the big banks are overcharging.
January 22, 2010 12:44 by Ben Flanagan
Consumers are vocal in expressing their dissatisfaction about bank charges in the UAE, with many turning to Twitter and other social networking sites to protest about interest rates and customer service issues.
While credit card interest rates were already high compared with other markets, some banks plan to increasing rates further. HSBC, for example, will increase the rate on its Premier Credit Card from 1.85 percent to 2.25 percent on February 1st, according to information published on its website.
Still jittery after the subprime crisis in the US and subsequent credit crisis, other banks impose minimum salary levels before granting customers credit cards. Lloyds TSB, for example, says in a statement on its website that a minimum monthly income of AED25,000 is required to meet the criteria for any of its credit cards.
However, the higher charges imposed by international banks could be due to the less competitive consumer environment, and local restrictions on banks such as the number of branches they are allowed to open in the UAE.
Do you think UAE banks are overcharging? Have your say by submitting a comment below.
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