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"Rates on credit cards at highest level in two years"

By admin | May 13th, 2009 | Credit Cards

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 rocketing, and they are now at their highest for some time, leaving borrowers facing higher repayments on their borrowing at a particularly financially turbulent time.

The government and various industry groups have been striving to tackle the controversy that faced the credit card industry with regards to charges and interest rates amongst other things, but the charges and rates have still managed to spiral out of control.

The result of a study indicated that on average credit card users were paying around 1.1 percent more now in annual credit card interest than they were two years ago, when the base interest rate was much higher. The base rate has now fallen to its lowest level in the three hundred and fifteen year history of the Bank of England.

One industry expert said: ‘This really is a case of the rise and rise of credit card charges. Even when we started monitoring average credit card fees they were already around 16% – so to see them continue to increase is testament to how much the card companies feel they can get away with. Credit is just like cigarettes and alcohol – it has become a highly sought after commodity and that means prices will go up until we’ve had enough. However, banks must be worrying whether they will ever actually get their money back anyway. Having charged so much interest many borrowers have been left with bills they simply cannot afford to repay.’

Tags: Credit Cards, credit card rates

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