Group gives card customers tips

10/06/2009

Customers facing rate rises on credit cards retain the option to cancel the product, Which? pointed out today.

Analysis from the consumer group also suggested that conditions in the card sector would get better in the future - but only when the recession is on the wane.

Which? offered the advice as the credit squeeze stretches budgets, leaving many people struggling with repayments.

Figures cited by the Financial Times suggest that lending flows for unsecured credit could have shrunk by around 40 per cent in the crunch.

Many card firms are pulling their cheaper deals from the market - and Moneyfacts.co.uk said last week that the typical APR is now above 18 per cent.

Martyn Saville, senior researcher at Which?, commented: "It's harder to get new credit cards [in the recession], so a lot of people have no choice but to pay the high rates at the minute.

"As soon as house prices start to recover or secured or even unsecured loans start to free up a little bit more, credit card companies will have to become more competitive."

He added: "One of the things that we really are recommending at the minute is that if your credit card company puts your rate up, you do have the right, now, to cancel the card but pay it at your old rate."

Tags; Debt Management and Banking, Credit Card Lifestyle, Recent Graduate Debt,

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