Credit conditions have eased substantially since last fall but try telling that to the Canadian big banks. The banks are continuing to increase the interest rates on secured and unsecured lines of credit. On the Canadian Money Forum, one member reported that the interest on his existing secured line of credit with ScotiaBank is going up by 1%. Others had reported earlier that TD Bank, CIBC and PC Financial had jacked up their rates. I have a SLOC with Royal Bank and the interest rate has stayed at Prime but I wonder how long a few banks will remain holdouts. Our Credit Line Agreement clearly states that Royal Bank can change the terms of the agreement:
We may make changes to this Agreement at any time. If we do, we will let you know before the changes take effect. If your Royal Credit Line is used or any amounts remain unpaid after the effective date of a change, it will mean that you have agreed to the change.
If a bank decides to increase interest rates, there is little that customers can do. The agreements clearly state that the bank can decide to change the terms and threatening to take your business elsewhere is unlikely to have sway the bank: new lines of credit are at least equally expensive.