Average annual card rates rise to 18%
By UK CreditCards.com
Annual rates offered by Britain's credit card firms rose again last month, despite there being no change to the Bank of England lending rate.
According to financial website Moneyfacts.co.uk, the typical APR now stands at over 18%, even though the Bank rate has stood at an all-time low of 0.5% since March.
Lending costs from the central bank have eased markedly over recent months, with the Bank rate standing at over 5% last summer. However, credit card firms have been affected financially in other ways by the financial downturn, which put the UK into recession at the end of 2008.
Moneyfacts.co.uk, which conducted the research, suggested that these pressures have effectively cancelled out the benefits offered by the Bank of England rate cuts.
Michelle Slade, analyst at the site, said: "Rising unemployment means that the risk of customers defaulting on their card repayments has increased, which is being passed on through higher rates."
She added: "Competitive credit card deals can still be found on the market, with 0% balance transfer deals available for 16 months and 0% introductory purchase deals for 12 months."
Published: 9 June 2009
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