Credit card costs 'rising'

20/11/2008

The cost of borrowing on credit cards has increased in the face of dramatic cuts in the base rate of interest, research has shown.

Figures from Defacto for the Independent reveal that rates on 240 credit cards have risen, climbing by an average of 0.4 per cent since May.

Meanwhile, the Bank of England's Monetary Policy Committee last week announced a cut in interest rates of two per cent.

However, Sean Gardner, director of MoneyExpert, claimed that many "desperate" consumers could still be tempted by high interest deals.

"The fear must be that with other forms of credit running dry, desperate consumers will be tempted into expensive deals as a last resort for Christmas," he warned.

Data from the company shows that more than half of firms on the market charge over 27 per cent interest on their store cards.

The market average is currently 25 per cent.

Tags; Debt Management and Banking,

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