Credit card companies up their rates

14/08/2008

Credit card companies in the UK are increasing their interest rates. This affects over three million card users and is yet another blow to consumers who are faced with the increasing cost of living in today’s economic climate.

The higher rates introduced by credit card companies are hitting those who are already faced with debt, that is existing card users who meet minimum payments only each month. New customers are less likely to makes card applications with the rates soaring.

Credit card companies are aware that credit card users are likely not have as much disposable income so are taking advantage of the situation. Card users are finding it difficult to find the extra cash to pay off debts on cards, so are being faced with this unfortunate situation.

As people rely more on credit to get by, it doesn’t seem like this situation will get any better in the near future. A number of credit cards have interest rates as much as 22% and even higher in some cases.

Steve Willey from Moneysupermarket.com said, “Firms jacking up interest rates will only make the debt problem worse in this country. Especially given recent figures that show the average cardholder have over £5,000 of easy credit.”

“People about to come off introductory zero per cent deals and expecting to be paying 15.9 per cent have instead found themselves facing an APR of 24.9 per cent, which is outrageous. Credit card firms should play fair.”