Consumers face credit card rate-hike

Wednesday, 23 July 2008 12:01

Nearly a third of credit card holders have seen the APR on their cards rise in the last year, exacerbating the UK's debt problem, according to moneysupermarket.com.

The comparison site claims 31 per cent of cardholders have faced an interest rate hike in the past year with Egg, Capital One, Lloyds TSB, MBNA and Barclaycard named as the main providers changing the APR.

Steve Willey, head of credit cards at moneysupermarket.com, said: "Increasing the interest on purchases will only make those rising food, fuel and mortgage bills harder to pay, and lengthen the time it takes people to clear their debts.

"Credit card companies should play fairer with customers. People, for example, about to come off introductory zero per cent deals and expecting to be paying 15.9 per cent have instead found themselves facing an APR of 27.9 per cent, which is outrageous."

In addition, more than one in four cardholders (27 per cent) did not know if the APR on their card had increased in the past 12 months.

The price comparison website recommends consumers check their APR and shop around for a better rate if it is too high.

Mr Willey added: "Despite all the doom and gloom there are still many excellent zero per cent purchase or balance transfer deals on the market for those with a good credit rating. Customers should look closely at their current card and see how it compares with the rest of the market."

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