NatWest and RBS took all teaser rate
credit cards off the shelf for new customers from Monday 17th March 2014 and launched a new Clear Rate Platinum Card, which has an upfront interest rate.
Some young, healthy people get the teaser rate
, but certainly not everybody does.
Experts believe that teaser rate
schemes hide a bombshell that could ruin your finances once they go floating.
In 2003, we had a new form of subprime, [and many of the subprime mortgages that were getting approved] essentially [had] a two-year teaser rate
, [After the two-year period, the rate] then went up to a much higher interest rate.
But as the public sector lender's teaser rate
proved a huge success, HDFC was forced to follow suit.
For both closed- and open-end credit, the required information includes the period of time that teaser rate
would be in effect, and the APR of the loan (or current payment) after the initial rate expires.
If you can't verify your income, you have nothing to put down on a new $600,000 home, and you can only afford the house at the introductory teaser rate
, is it really all the fault of the bank lender and mortgage broker that you defaulted?
This explains why they are drawn to the zero percent teaser rate
while dismissing the threat of the 2999 percent penalty down the road.
Consumers told us that their primary reason for acquiring a card was the APR, and it was also the primary reason for cancelling the same card once the teaser rate
If we see too many lenders coming into the teaser rate
space and the critical mass of such loans is too high in a portfolio, it could become a systemic concern.
Likewise for anyone holding a teaser rate
loan with a mortgage payment that's going to rise come adjustment day.
In Q4 2010 58% of introductory balance transfer offers promoted a teaser rate
duration of 13 months or more compared to just 20% a year ago.