UK department store John Lewis has increased the interest rate on its Partnership credit card, joining the many others credit card providers that have been hiking up the rates on their cards over the past year. With the global credit crunch and rising bills already hitting consumer’s pockets hard rising credit card and borrowing costs have impacted further on households’ ability to keep on top of repayments, and a number of credit card providers have increased their borrowing costs, fees, and charges over recent months.

According to recent reports there are a number of costs, fees, and charges that have been hiked up on the John Lewis credit card, which will make it more expensive for consumers to borrow money and make purchases on the card. The balance transfer fee on the card has been hiked up from 2% to 2.5%, which will affect those transferring balances onto the card. The fees for withdrawing cash on the card is also set to rise from 1.75% to 2.5%, which will affect those taking money out on the card.

Customers will also be disappointed to learn that the allocation of payments on the John Lewis card is set to change. At present repayments are allocated to cash withdrawal balances first, and these are the ones that incur the highest rate of interest. However, under the new structure purchases will be the first to be paid off, and this will leave cash withdrawal balances to continue accrue crippling interest rates.

One industry professional stated: ‘A lot of people pay off their credit cards every month and so earn little for lenders. Some of these people are seeing their limits cut or their accounts closed. Otherwise, card firms are raising rates and applying higher fees to make up for lost revenues elsewhere.’

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