Credit Card Blog

Although the Bank of England base rate has been reduced by nearly half – from 5% to 3% over the last few months, to try and combat the worsening economic situation, credit card interest rates have actually gone up. It’s been reported that the average credit card interest rate has risen from 17.2% to 17.6% over the same period.

This is a worrying trend for credit card users, and suggests that the banks, many of whom have seen huge losses due to plummeting share prices, are looking to squeeze more money out of other aspects of their business – in this case, credit cards.

The problem though is heightened by the fact that Britons are reported to owe over £200 billion in credit cards, store cards, overdrafts and other forms of unsecured borrowing. 

The cost of paying this back has been increasing with this interest rate increase on credit cards, at a time when unemployment has also increased, as has inflation and the general cost of living. 

Even more worrying is that this could effect any resurgence in the economy, as debt becomes harder to manage and pay off. With credit cards especially, with an average rate as high as 17.6%, repaying any substantial balance can become a real burden. There are still a number of credit card providers with lower rates than the average, but this trend is something that does not bode well for consumers. It does however increase the importance of looking for credit cards that have 0% interest rate promotions.

If you’re looking to get a credit card – please be aware of this, and take into account that your credit card provider may increase their rates.

This entry was posted on Tuesday, November 11th, 2008 at 12:25 pm and is filed under Uncategorized.
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