- Tuesday, 16 February 2010Record credit card interest rates could see more Brits seeking
IVA help in a bid to control their finances.
New figures released by Moneyfacts.co.uk reveals that credit card rates have hit a 12 year high of 18.8 per cent, following a period of steady increases.
This is despite the Bank of England holding the base rate at an all time low of 0.5 per cent.
Moneyfacts.co.uk spokesperson Michelle Slade said providers are concerned about the increased risk of customers not repaying their debts, given the high levels of unemployment.
"This increased risk continues to be passed onto both new and existing credit card customers through higher rates," she said.
Borrowers with £5,000 debt on their credit card and paying the minimum repayment each month are now facing an additional £2,289 over the life of the debt compared to February 2006, said Ms Slade.
Commenting on the figures, Andrew Hagger of Moneynet.co.uk said while the average purchase rate for new customers is now approaching 19 per cent APR, this was "far from the real picture".
"Applicants with a less than squeaky clean credit record will end up paying much more," he added.
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