Experts have warned UK borrowers that only those with ultra-clean credit histories will be able to take advantage of some of the latest attractive offers from credit card companies.

Barclaycard now offers its Platinum Card with an interest-free balance transfer that lasts for an unprecedented two years. The fee for the transfer is 2.8%, and there’s a discount of £20 for a transfer of at least £3,000. Virgin Money is also in on the act, with an interest-free balance transfer lasting 19 months, and MBNA offers the same.

Whilst these deals will appeal to many looking for a good deal on borrowing during tighter financial times, many will struggle to get the offer they want, and may be forced to look at alternative lending at a much higher rate of interest.

Anyone who has made a late credit card payment, or reneged on an agreement with a bill company, will find that their credit history has taken a hit as a result. Your credit history is used by lenders to assess your ability to make payments and your reliability as a borrower. Should you have any question marks hanging over you, then the best credit card deals are likely to elude you.

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UK credit card holders are facing even higher interest rates, as banks find ways to counter new profit-cutting legislation.

As of the start of the year, lenders must use repayments to clear the most expensive debts first, and this inevitably results in lower profits.

The Daily Mail reports that lenders have increased the interest rates on 18 credit cards since the beginning of 2011, despite the fact that the Bank of England base rate has stayed at 0.5%. The article highlights that by this time last year only 4 cards saw a rise in APR.

The information, gathered by Moneyfacts, also added that the average interest rate for purchases is now 19.1%, which is a 13-year high. The jump in rates varies from 0.6% to 2%, with providers such as Halifax, NatWest, Barclaycard, Royal Bank of Scotland, Sainsbury’s Finance and Santander all raising rates, with borrowers once again losing out.

Michelle Slade, of Moneyfacts, said: “Card providers have also been hit by claims for PPI misselling, which has seen them having to repay money to customers. It is unlikely we have seen the last of these rate rises.”

Recent figures have indicated that the level of credit and debit card fraud in the UK is continuing to decrease. This encouraging news serves to highlight the growing efficiency of anti-fraud measures put in place to protect our finances, as well as the increased vigilance among UK cardholders.

According to the UK Cards Association, a total of £365.4 million was lost through credit and debit card fraud in 2010; whilst this is a huge sum of money, it actually represents a 17% drop from the 2009 figures. This has been attributed to the roll-out of chip-and-pin, and improved customer awareness.

It was also found that phone, mail-order and internet fraud dropped by 15% thanks to the Verified by Visa and MasterCard Secure Code anti-fraud systems that now operate on the web.

It’s not all good news though, as phone banking fraud totalled £12.7 million, equating to an unwelcome increase of 5%.

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Barclaycard and Nationwide are tussling to provide the best 0% offer on credit card balance transfers, whilst other providers look to get in on the attractive market.

Nationwide has just released a new card that matches the 17 month 0% offer originally pitched exclusively by Barclaycard to its customers.

Whilst this was the longest length of time for such a rate available on the market, Barclaycard has upped the stakes by changing its offer to 18 months, and this taking the lead once more.

Balance transfers are a great way for customers to pay less interest on a borrowed sum of money. Any specific lender would rather that you owed them, instead of a competitor, so attractive offers are advertised as an incentive that will genuinely provide savings.

0% on your balance transfer will mean that you don’t pay anything extra on top of your standard repayments, whilst using a credit card to make direct purchases could lead to a rate of 25% APR or more.

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A forthcoming initiative designed to benefit UK borrowers will actually result in advertised interest rates that are less indicative of actual rates, but consumers are assured that this will result in a clearer picture and a positive move towards more responsible lending.

The current rules require lenders to advertise the APR, or annual percentage rate, that would apply to 66% of UK borrowers, meaning that a third would be getting a higher rate than they expected.

The new Consumer Credit Directive will require lenders to advertise a rate that applies to only 51% of successful applicants, so very nearly half will be disappointed with their actual APR for their credit card or loan.

The Telegraph has reported that roughly 70% of loan applicants are unsuccessful, and, with the Consumer Credit Directive in force, only half of the remaining 30% of applicants will get the advertised rate. This means that a mere 15% of total loan applicants can genuinely expect the interest rate that first caught their attention.

Whilst this initially appears like bad news for borrowers, there are noteworthy positives. When a consumer is turned down for credit, there is no obligation for the lender to supply an explanation; that individual must apply for a credit report, and they may even need a report from more than one of the UK’s three credit reference agencies. On top of this, the problem may have nothing to do with their credit score. The process can be arduous, but with this new initiative lenders will be required to explain any application refusal, whilst also supplying the details of the relevant credit reference agency and how to get in touch.

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Recent figures suggest that people in the UK are being forced to turn to payday loans and credit cards such as Vanquis in an attempt to keep themselves above water. This results in crippling interest rates that families will struggle to pay back. Credit firm Provident Financial receives 2,700 applications per day for its Vanquis card, according to the Mail Online.

The Telegraph recently revealed that one in five Britons have three or more credit cards, with 17% using one of their cards at least once a day. A quarter of the UK’s 30 million credit cards saw an increase in interest rate over the last year, with credit card debts of £2,000 now taking two years to clear if you pay back £100 a month.

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Mortgage approvals rose to their highest level since March 2008 in September, the Bank of England has reported.

The number of mortgages approved for houses purchased rose by 3,000 in September to 56,000.
Non-mortgage borrowing by individuals shrank for the third consecutive month, representing the most sustained fall since records began in 1993.

Figures released by HM Revenue & Customs show a rise in house sales to 82,000 in September, double that of January.

“Lending activity has recovered in recent months, when compared to the start of the year, as buyers and sellers tentatively return to the market,” said Adrian Coles, of the Building Societies Association (BSA).

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The government has put forward a series of proposals to outlaw unfair credit card terms. These include stopping card firms raising interest rates on existing debts, and increasing someone’s spending limit without first asking their permission.

Under the proposals, credit card companies would also have to ensure that a customer’s most expensive debt is paid off first, and the size of minimum repayments would be raised in order that debts be paid off faster.

The UK Cards Association (UKCA), which represents British card issuers, said it would study the proposals.

“We need to be able to demonstrate what impact these would have on consumer choice and the costs to customers of using credit cards,” said UKCA chairwoman Melanie Johnson. “We will be reviewing the evidence and we expect the government to do the same.

“These proposals risk disadvantaging more customers than they protect,” she added.

The government has called on credit and store card companies to “clean up their act” with regard to “unfair” charges that are not explained properly to the customer.

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Millions of credit card customers could be putting their details at risk thanks to negligent UK call centres, 97% of which repeatedly breach guidelines on data security, according to a report published today.

A nationwide survey of UK call centre managers by audio recording specialists Veritape found that calls containing sensitive details about customers’ credit cards, including their three-digit security code, are routinely stored on call centre computers, leaving credit card holders exposed to fraud.

This is in direct breach of global industry standards drawn up by the Payment Card Industry Data Security Council.
The report, called The Great Credit Card Gamble, found that over nineteen in twenty call centres that store recordings of transactional conversations with customers do not delete or mask any sensitive information revealed during these calls.

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Cases of identity fraud have skyrocketed during the economic downturn, with the number of victims of identity theft increasing by a third since the start of the year, according to the fraud prevention service CIFAS.

The past nine months have seen 59,000 recorded cases of impersonation by criminals seeking cash, loans, credit and goods this year. This means the UK has had more instances of identity fraud this year than any other country in Europe.

Account takeover, whereby a criminal hacks into an existing account rather than setting up a new one, have more than tripled in the last two years. More than half of these instances involved credit card accounts. The increase in online shopping and customer carelessness are both thought to be behind the rise. A quarter of takeovers affected bank accounts, while the number of mobile-phone accounts hijacked increased from 899 to 2,022.

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