No free lunches at Nationwide

YOUR MONEY

Savers will pay for Nationwide's latest cut in mortgage rates to 6.49 per cent, the lowest in the high street since 1965. Announcing it as "demonstrating you really are better off with a building society" Nationwide admitted it would also cut savers' rates. Being a saver and not a borrower with Nationwide, that's not my idea of this mutuality guff.

I hope this move will trigger a new price war among lenders, but as of close on Friday no one else had dropped.

In the meantime there are questions of fairness. There are only 1 million Nationwide borrowers, now seeing real improvement in the housing market and with good loan rates. But there are 7 million savers who have already been squeezed to pay for mortgage deals to kick-start the housing market.

If cheaper mortgages must mean shaven savings, why couldn't members have been asked (after all, they own the society) whether they wanted them? Indeed, the society had its AGM only last week where, interestingly, rebel members were narrowly defeated in a challenge to boardroom pay.

So this is mutuality? I'll have my windfall any day, or at least I would if my society would give me the choice.

Fancy a discount of pounds 5 if you spend pounds 500 on your credit card? So do I. A volume discount is what I'd call competition, not this phoney war.

Last week it was reported that two US issuers were signing up people for cards with single-figure interest rates, deeply undercutting other providers. One of these "tigers" (so-called for their aggressive competition) was reported to be offering "by invitation only" a fee-free card with an interest rate of 8.9 per cent. But in reality the MBNA Silver Card is less enticing. The 8.9 per relates only to debt transfers - new bills are on a 16.9 per cent tariff. Another card, from Capital One Bank, was said to offer a competitive 9.9 per cent for low-risk customers.

But this rate competition only makes a difference if you pay interest on your card. If instead you are among the millions who pay off your bill at the end of the month the debt rate is irrelevant.

Unfortunately I have yet to find an issuer to take up my challenge to offer volume discounts, although they are said to run in the US. In the meantime, however, there is also anecdotal evidence that some issuers with fees are waiving them on the quiet to customers who kick up a fuss. Do so, or switch.