Consumers hit as credit card rates soar

| January 13, 2010 | 0 Comments
”Consumers

Despite the fact that interest rates have been on hold at the historically low rate of 0.5% since March 2009, the average credit card interest rate rose from 15.89% to 16.28% in December, according to figures from the Bank of England.

The bank also revealed that the average credit card interest rate is now at its highest since September 2006.

The figures may come as a shock to the 9 million Britons who used plastic to pay for the expensive festive season.

Furthermore, it will come a severe blow to the one million who used their credit card to pay for their mortgage or rent in the last 12 months.

It was revealed just before Christmas that Capital One, which is one of the biggest credit card providers, was hiking its rates for many customers.

Rates surged by 7%, with some customers being charged nearly 40%.

In related news, the latest credit card Customer Satisfaction Survey by uSwitch.com found that almost one third of credit card customers are dissatisfied with their credit card provider.

Commenting on its findings, Louise Bond, personal finance expert at uSwitch.com, said: “Tightened lending criteria and consumer cutbacks have prompted many to loosen the reliance on their flexible friends. However, for many, credit cards will remain an invaluable way of smoothing out any peaks and troughs in personal income.”

She adds: “It’s disappointing that customer service is still letting the card companies down, and the huge gap between the best and worst providers shows just how different one customer’s experience can be to another’s.”

u.Switch recommend comparing credit card deals to ensure the consumer gets the best deal on offer.

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