The average credit card rate for new customers has now reached 18.9 per cent, a 13-year high level, according to a new report by independent comparison company, Moneyfacts. Although the Bank of England base rate has remained at 0.5 per cent for nearly the last two years, credit card rates have continued to rise, with people having to pay an average APR more than 35 times higher than what banks are paying.
Michelle Slade, spokesperson for Moneyfacts.co.uk, commented “During the financial crisis many card companies reassessed their existing customer base and many customers have seen large increases in the rates they are charged. Customers who would previously have switched to another provider are now finding its not so easy to do so.
It is also reported that new rules have just been introduced which mean that if a credit card provider does promote a low card rate, you are not necessarily going to be accepted for it. Credit card providers used to be able to advertise a typical rate, while the rate actually offered was dependent on their financial history.
Previously providers also had to provide two-thirds of successful applicants with the advertised rate, but the new Consumer Credit Directive (CCD), which came into effect yesterday, means this drops to only 51 per cent.
Ms Slade added “Competitive deals for balance transfers and introductory purchases remain on offer, but card providers are selective over exactly who they accept for these deals.”
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Tags: Credit Card, High
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