Earlier this month the Bank of England announced that for the tenth consecutive month of rate base is to remain at an all time low at only 0.5 percent. However, despite these credit card companies continue to raise their interest rates, and according to recent reports of rising interest rates are set to hit the buyer because they are struggling to pay off the debt they have incurred over the Christmas period.
Figures show that the gap between basic rate and the average amount of interest charged on credit cards now at the highest level on record, with an average rate of credit card interest rate rose from 15.89 percent to 16.28 percent in December. It is estimated that about nine million Britons use their credit cards to finance their Christmas celebration, and an increase in interest rates will create difficulties for many of the people when it comes to payment.
Many people also have used their credit cards to make mortgage payments or rental property for several months and rising interest rates will also cause problems for many of the consumer. Just before Christmas one of the major credit card providers, Capital One, said to have increased the average interest rate to 7 percent in some cases, with some customers seeing interest rates pushed to nearly 40 percent.
According to the official average credit card interest charges are now at the highest since September 2006, with banks making big profits as a result of rate hikes. Many are angry with rising credit card rates given that the Prime Minister, Gordon Brown, said last year that he would speak of unfair practices by credit card providers and will ensure the ‘new approach to responsible lending’ a.
Over the last few months many industry experts urged consumers to ensure that they contact their credit card provider if their interest rates climb up to ask for an explanation, and stated that they want to assess recoverable in the event there is no reasonable explanation. However, those who do not persuade their lenders to reduce rates again should look at switching to a new service that offers a lower rate of interest.
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