Lenders Raising Costs
November 23, 2008
Over the last three months the cost of credit card borrowing has gone up considerably with new figures showing that more than 10% of credit card providers are raising their rates. Sixteen credit card providers have put up the interest rates on purchases since August and all this has happened not taking into account the drops of Bank of England base rate. All this information has been put togeather by financial information group Moneyfacts.
Along with this another twelve cards have put up the interest on cash advances sometimes being an additional 5% interest added onto what is already an expensive way of getting cash.
11 balance transfer cards are also being changed by some providers where the transfer fee has gone up or there has been a reduction in the amount of time you have the 0% balance transfer period for.
Moneyfacts have noticed that in the last three months the average interest rate has risen from 16.8% to 17.2%. Analyst for the group, Michelle Slade says “During the past year, card companies have continued to increase the charges on their cards and consumers will find they will be stung more severely than ever before.”
“Just like on mortgages, card companies are factoring in a much bigger margin for the risk of consumers defaulting, so rates are going up rather than down.”
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