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"Consumer group says credit card rates will have to fall"

By admin | August 6th, 2009 | Credit Cards

A leading UK consumer group has recently predicted that credit card rates in the UK will have to start coming down as the country comes out of recession, and that whilst many consumers may have no choice but to pay higher rates of interest on credit cards at present there should soon be more choice and more competitive rates of interest available to many consumers when it comes to their credit cards.

With the average rate of interest charged on credit cards having broken through the 18 percent barrier, many consumers and campaigners have been outraged that credit card customers are getting ripped off for crippling rates of interest despite the fact that the base interest rate is at an all time low of just 0.5 percent.

However, credit card rates have continued to increase, and are now around 2 percent higher on average than two years ago even though the base interest rate is just a fraction of what it was.

However, Which? officials have said that this situation could soon start to reverse as the nation starts to come out of recession, and as house prices and financial markets start to improve.

One official from the firm said: “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.”

The group also offered some advice to those who were paying off credit cards but who had found that their rate of interest had been increased.

An official said: “One of the things that we really are recommending at the minute is that if your credit card company puts your rate up, you have the right to cancel the card but pay it at your old rate.”

Tags: credit card rates, Credit Cards

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