The stores in the UK are now being 'investigated' because of the
extortionate interest rates they charge for credit taken via their
cards.

This appears to be of the order of 29.5% which is the rate that banks
have traditionally charged their customers for 'unauthorised'
overdrafts.

29.5% seems to be a magic figure but I have been unable to find it
specified anywhere.

Possibly it relates to usury on money lending.
 
Can anyone throw any light on this magic figure?

Hi Bryan

Legally, there is no maximum interest rate:

"Since the introduction of the Consumer Credit Act of 1974, the UK has
had no statutory ceiling on interest rates. The Moneylenders Act 1927,
Section 10(1), created a presumption that interest was excessive, and
the transaction harsh and unconscionable, if the rate of interest
exceeded 48% per annum. Hence, where interest was above 48%, the onus
was on the lender to refute that presumption; in other cases, the onus
lay on the borrower to show that the interest rate was excessive. The
Pawnbrokers Acts 1872 and 1960 laid down a tariff of charges that
could be made by pawnbrokers."

Quote taken from this document which also includes details of interest
rate ceilings in other countries:
http://www.church-poverty.org.uk/Irc.pdf

On small loans, 19th century pawnbrokers could charge a halfpenny a
month for every two shillings advanced - so no 29.5% there either.
http://www.pbenyon.plus.com/Shilling_Law/Mortgages.html

Afraid I've no idea where the 29.5% figure comes from, but I would
like to know, so I hope someone can answer this  - Leli

Hi, Leli

Many thanks for your comment, even though you have drawn a blank.

Maybe it's one of those undocumented features that the British Banking
Community and Microsoft so adore?

Bryan

Perhaps "magic" figures are no longer magic once they're documented?