Credit card rates will have to come down
August 10, 2009 by admin
Filed under News, News-Credit-Cards
In a recent report a leading consumer watchdog groups has said that credit card interest rates in the UK are going to have to come down.
Officials have said that at the moment, whilst the country is still in the midst of a financial crisis and in the grip of recession, many consumers may have to put up with higher rates of interest on credit cards, but that this will have to change once the country starts coming out of recession.
Officials from the consumer group Which? have said that the credit card market will have to become more competitive as the nation comes out of recession, and this means that many consumers will find that they are able to get far more affordable credit card deals in the future, as credit card interest rates start to come down.
However, it could still be some time before this happens. In the meantime many cardholders will be left to cope with crippling rates of interest.
Over recent months the average rate of interest on credit cards has soared, breaking through the 18 percent barrier despite the fact that the base interest rate has plummeted to just 0.5 percent, which is the lowest level in the three hundred and fifteen year history of the Bank of England.
One official from Which? said: “It’s harder to get new credit cards [in the recession], so a lot of people have no choice but to pay the high rates at the minute. As soon as house prices start to recover or secured or even unsecured loans start to free up a little bit more, credit card companies will have to become more competitive.”
However, the group also added that if anyone was unhappy with their credit card interest rate at present they had the right to challenge the rate of interest that was being charged, and this could lead to the rate of interest being reduced. An official from the group said: “One of the things that we really are recommending at the minute is that if your credit card company puts your rate up, you have the right to cancel the card but pay it at your old rate.”
Tags: higher rates, interest rates, choice, Credit Cards, year, increase credit card rate, company
