Related Credit Card Article

"Interest rates on credit cards are still on the rise"

By admin | March 16th, 2009 | Balance Transfers

Some industry officials and consumers have expressed concern because the interest rates that are being charged on some credit cards are still rising even though the base interest rate has plummeted to its lowest level in the history of the Bank of England, at just 1 percent.

Some customers that are being classed as higher risk are seeing their credit card interest rates rise even though the base rate has been cut dramatically.

One example of this is Egg, which is owned by the US based financial giant, Citi Group. Egg has recently written to many credit card customers that it claims are higher risk because they are now more likely to default because of the financial situation. It has told affected customers that that credit card interest rate will rise by 5 percent, leaving these higher risk borrowers paying 26.9 percent interest on their credit card borrowing.

Around one in every five Egg credit card customers will be affected by the interest rate increase, and has been contacted by the credit card giant to inform them of this. However, another 120,000 Egg credit card customers have recently been contacted to advise them that their credit card interest rate will now be falling, and these are the ones that Egg classes as lower risk borrowers.

One industry official said: ‘The APR isn’t an interest rate. It represents the total cost of credit, including charges such as cash machine withdrawal fees. Only Marks & Spencer Money and Egg have lowered their rates in the past six months. M&S cut the purchase rate from 18.9% to 15.9% in September, while Egg reduced the interest on cash advances from 24.9% to 22.9% this month. Barclaycard is freezing the interest rate for its 9m customers for four months.’

Tags: Credit Cards, credit card interest rates

Related Articles:

• Barclays cuts rates for some credit card customers

  With the base interest rate now at an all time low, standing at just 1 percent, which is the lowest in the history of the Bank of England, credit card firms have been under pressure to cut the rates charges on their cards. One major credit card provider, Barclaycard, has recently announced that it is...

• Consumers can benefit from contesting credit card fees

  Many credit card firms have increased credit card interest rates for customers without any explanation or reason in a bid to make more money from the consumer. However, a recent report has suggested that consumers should always contest any unexplained credit card interest rate increase with their provider, as there is a good chance that...

• Average credit card rates shoot up once again

  Over the past seven months the Bank of England base rate has declined to its lowest level in the three hundred and fifteen year history of the central bank, sinking to an all time low of just 0.5 percent, which is just a tenth of the level it was at in October of last year,...

• Rates on credit cards at highest level in two years

  According to industry experts a series of widespread increases has resulted in credit card charges in the UK soaring to their highest level in two years. Although the base interest rate has been slashed from 5 percent last October to just 0.5 percent by March of this year, credit card rates and charges have been...

• New high for credit card interest rates

  Recently released figures have shown that credit card interest rates in the UK have reached a new high, despite the fact that the base interest rate in the UK has remained at a record low of just 0.5 percent since March of last year. Research by a finance industry group has shown that credit card interest...

Other Recent Articles

Use of credit cards declines whilst payday loans increase

It seems that many consumers may have switching from spending on credit card that can sometimes come with high rates...

By Reno | February 10, 2012 | Read More

Useful Tips for Credit Card Holders

Modern technology offers comfort and convenience that is often helpful for people in a fast paced everyday living. With just...

By admin | February 7, 2012 | Read More

Credit card decision by Lloyds could have serious effect on charities

For many years now, a range of leading and well known charities have been able to boost the levels of...

By Reno | January 28, 2012 | Read More

Many have to rely on credit cards to make ends meet

There was a time when people had credit cards to enable them to pay for occasional larger, more expensive items...

By Reno | January 26, 2012 | Read More

Brits increasingly dissatisfied with credit card providers

According to recent reports, Brits are becoming increasingly dissatisfied with their credit card providers, particularly in the case of the...

By Reno | January 20, 2012 | Read More