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UK Credit Continues To Get More Expensive

Personal_Finance / Credit Cards & Scoring Jun 04, 2008 - 04:45 PM GMT

By: MoneyFacts

Personal_Finance Michelle Slade, analyst at Moneyfacts.co.uk, comments: “With increasing costs on all household bills, many people are relying on their credit card to get by each month. But these people are going to find themselves out of pocket as purchase and cash rates, along with charges, continue to increase.


“Since the beginning of the year there have been numerous increases to rates and charges, with some cash rates being increased by over 7% and purchase rates by as much as 3%. Latest Moneyfacts.co.uk research reveals:

· 22 purchase rate increases
· 15 cash rate increases
· Over 30 increases to fees (including balance transfer fees, cash withdrawals fees and foreign
usage loading)

Full details of the increases are shown below

“The number of increases to purchase APRs is quite phenomenal. Normally credit card providers avoid such increases as these are the rates customers see first. It goes to show just how tough credit conditions have become for the institutions and this is being passed onto consumers.

“For example anyone with £5,000 of purchases on the Nectar Credit Card AMEX repaying the minimum 2.5%, min £5, the 3% increase will find themselves paying an additional £1,823.75 in interest over the life of the debt.

“Credit card providers are tightening their criteria and anyone with a less than perfect credit history may struggle to get the most competitive deals. However, for those with an exemplary credit record there are still good deals to be had.

“The first thing to do when looking for a new credit card is to look at how you will use the card. If you have an existing debt on a card, it may be worth considering a 0% balance transfer deal. Currently balance transfers best buys are topped by Virgin Money’s MasterCard which offers 0% for 15 months. Alternatively, if you are looking to make some new purchases, you may wish to consider a 0% introductory purchase deal. HSBC’s Bank Credit Card MasterCard is currently offering 0% for 12 months. Anyone looking for a low rate card will find Barclaycards Simplicity Visa at 6.8% an attractive deal.

“Rates and charges on credit cards are only likely to continue to increase in the months ahead. If you are not happy with you current deal, make sure you shop around for a better one.”

Purchase rate increases

Cash rate increases

Charges increased

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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