HSBC is increasing the Annual Percentage Rate (APR) on many existing credit card accounts, affecting thousands of customers across the UK, including those with branches in Birmingham. The change takes effect on October 1.
APR Increase Details
An HSBC UK spokesperson confirmed: “The current APR for the majority of new HSBC UK Credit Card customers is between 24.9% and 29.9%, and we’re in the process of contacting some customers to bring their APR closer in-line with our current offering.” This means existing customers with lower rates will see their APR rise to match the range offered to new applicants.
Understanding Representative APR
APR, or Annual Percentage Rate, is a standard measure used to compare credit products. The representative APR is an example rate that lenders must offer to at least 51% of successful applicants. For credit cards, it typically reflects the standard purchase rate and includes compulsory charges like annual fees, but excludes optional extras such as payment protection insurance or penalties for late payments.
The representative APR calculation assumes a credit limit of £1,200, spent in full on day one, and repaid in equal monthly instalments over a year with no further spending. It does not account for different rates on balance transfers or cash withdrawals.
Impact on Customers
HSBC is contacting affected customers directly. The actual cost to each cardholder will depend on their final offered rate, how they use the card, and their repayment habits. Customers are advised to review their statements and consider alternative options if the new rate proves disadvantageous.
