Related Credit Card Article

"Default on credit card debt still big risk"

By Reno | August 27th, 2010 | General

It has been reported that banks and credit card providers are still viewing the possibility of defaults on credit card debts as a high risk, and with this in mind officials believe that credit card interest rates are unlikely to fall any time in the foreseeable future, despite the fact that they are already so high given the rock bottom base interest rate, which still stands at just 0.5 percent.

Credit card interest rates have reached levels that have sparked concern and complaint, with many outraged that the rates should be so high given that the base interest rate is at its lowest level in the history of the Bank of England. However, credit card firms have argued that the risk of default on credit card debt means that they have to charge higher rates of interest.

The rates charged on credit cards can vary based on the card, the provider, and the cardholder. There are some cards that offer more reasonable rates of interest but these are generally reserved for those that have excellent credit histories and are therefore classed as a lower risk when it comes to defaults.

However, there are also credit cards that charge astonishingly high rates of interest can cater for those with damaged credit ratings, who are the people that are classed as high risk borrowers because they are more likely to default on their credit card repayments.

With concerns of job losses and sustainable recovery in the economy still causing problems many lenders are unwilling to take the risk of dropping their interest rates. Many are also still being very selective over who they offer finance and credit to.

Tags: finance, default, Credit Cards, Credit Cards, interest

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