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Credit card firms increase charges despite record low interest rate

Credit Card companies have been increasing their interest rates or charges over the past year, in spite of the Bank of England reducing the base rate to a record low of 0.5%, according to consumer watchdog Which?

The watchdog found that 28 major credit card firms had either increased rates or charges or reduced the number of interest-free days for purchases.

With cash flow increasingly tight many small business owners have been putting company purchases on their credit cards. However, the average card rate was up 0.5% in a period when the Bank of England's rate fell from 5.25% to 1%.

"At a time when we're all feeling the pinch, it's hugely disappointing that credit card companies are choosing to put the squeeze on borrowers more than ever. With interest rates so low, it is time for credit card providers to enter the real world," said Martyn Hocking, editor of Which?

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Post Date: April 22nd, 2009