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Credit card charges could be increased by banks

November 19, 2009 by admin  
Filed under News, News-Credit-Cards

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Over the past eight months the base interest rate in the UK has remained at an all time low of just 0.5 percent, with the Bank of England announcing only last week that the base rate was to remain at this record low for yet another month.

However, despite the rock bottom base rate reports have indicated that banks may be set to increase credit card interest rates, which could prove very bad news for consumers in the current climate.

Officials from PricewaterhouseCoopers have said that a 50 percent increase in bad debts amongst credit card borrowers is expected and in order to prepare for this onslaught of bad debt credit card providers are looking at increasing credit card interest rates, which could have a profound adverse effect on borrowers that are already struggling with their finances.

It is thought that in the near future around one thousand people a day will be seeking assistance because they cannot keep on top of their credit card repayments, and banks are finding ways to recoup the money that they are set to lose from these bad debt levels by upping various charges and fees on credit cards, such as the interest rate, cash transaction fees, and annual fees, all of which will impact on borrowers’ finances.

It is thought that more banks will start turning away customers that they do not consider to be profitable, and a rising number of banks will start charging higher annual fees and charge customers simply for the privilege of having a credit card account.

A PcW report stated: ‘Levels of write-off of this magnitude have never been experienced by the UK industry before. Credit will become more expensive as lenders attempt to claw back revenue lost as a result of economic and regulatory pressures.’

Tags: write-off, record, order, regulatory pressures, credit card charges, credit card fees, Credit Cards, card borrowers

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