Rates on credit cards still rising

A recent report has indicated that the rates and charges on credit cards in the UK are continuing to go up, and figures show that over the past six months the average interest rate on a credit card has gone up by 0.5% despite the fact that the base rate has come down by 0.75% since December of last year.

According to figures there has been an average rise of 0.56% on credit cards for purchases, with the average rate now stranding at 17.12%.

The average rate on balance transfer cards has risen by around 0.83% taking it to 15.95%.

Some industry officials claim that credit card companies have been raising fees, charges, and interest rates on credit cards because they are trying to recoup financial losses that occurred as a result of the penalty fee cap of £12 that was brought in by the Office of Fair Trading two years ago.

One industry official stated: “Most of us would normally seek out a new zero per cent deal to tide us over the bad times, but with lenders playing a cautious game, getting one of those cards is more difficult than it used to be. This means more of us will have to use our current credit card and if the 0 percent deal has expired, you’ll be borrowing money at a rate of around 16 percent; be careful what you spend on the plastic because the interest will soon mount up.”