Labour under fire for "hypocritical" affiliate credit card
The Labour Party is accused of hypocrisy over its tough stance on credit card interest rates while profiting from its own affiliate card that charges more than nine times the Bank of England base rate.
Labour under fire for "hypocritical" branded credit card
Despite recent dramatic cuts to the Bank of England rate the Labour Party credit card rate remains unchanged at an uncompetitive 18.9%.”
The party's affiliate credit card charges 18.9% APR interest, which jumps to 23.9% for cash transactions. This is more than three times more expensive than its most competitive rival.
Despite recent dramatic cuts to the Bank of England rate, now at a 57-year low of 2%, the card's rate remains unchanged. In fact it has risen from the original rate of 17.9% set five years ago when it was launched.
The card issuer, the Co-operative Bank's own card is only 9.9% APR while Barclaycard offers 6.8% APR.
Consumer groups slammed the government for failing to keep its own house in order while preaching to credit card companies to cut their rates and be more competitive.
At a recent credit card summit, Business Secretary Lord Mandelson and Consumer Affairs Minister Gareth Thomas warned the industry to pass on rate cuts or face action from the Office of Fair Trading.
Independent financial advisor Mark Dampier of Hargreaves Lansdown said: “The rates charged on the Co-op card just go to show what a bunch of hypocrites politicians are.”
Debt specialist Sean Gardner was also critical.
He said: “When the government is preaching to banks to be competitive it is a bit two-faced not to be doing it themselves.”
The Labour credit card operates on the same principle as cards affiliated with charities. However charity credit cards are significantly more competitive.
A £15 donation is made to Labour every times a card is issued and from then on a small percentage of every purchase is also donated.
The party's own promotional literature trumpets that it has raised £1 million to date through the card.
The Co-op issues a card on similar terms for the Liberal Party, which has 3,500 account holders compared to 15,000 for Labour.
The Conservative Party offers a card run by MBNA. It has a rate of 15.9% that soars to 27.9% for cash transactions. While it is no longer promoted by the party, it remains open to new applicants.
A Labour Party spokesman said: “Neither the Labour Party nor the Co-operative Bank promote irresponsible borrowing, in full awareness that individual circumstances differ, and that credit cards when used responsibly are a legitimate tool of financial management.”
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