- Thursday, 11 March 2010Some one million financially-strapped consumers have turned to a sub-prime credit card charging rates of 60 per cent, it has been reported.
Credit firm Provident Financial has stated that it receives up to 2,700 applications a day for its Vanquis credit card, traditionally directed at borrowers with a bad credit history, the Daily Mail reports.
Yet more people who are being turned away by High Street banks are reported to be using the high-interest service with average rates of up to 59.9 per cent.
The news provider refers to recent figures from the Bank of England that reveals UK consumers owed £61.5 billion to credit card companies in January.
This is combined with the fact that many banks are now beginning to adopt strict lending criteria.
Chris Tapp, director of debt charity Credit Action, told the news provider: "The fear is that many people will have to turn to payday loans companies or doorstep lenders which can charge exceptionally high amounts."
People could manage their credit card debt by way of using some of their savings, according to moneysupermarket.com.
The organisation states that repaying just £20 per month extra off a credit card bill would reduce the overall interest by a third, and the balance would be repaid 17 years earlier.
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