Credit cards 'will see interest rise further'

By Sarah Engle, Wed 30 Jun 2010 - Published in Credit Cards

The interest rates applied to credit cards will continue to rise in the UK, it has been suggested.

A spokeswoman for Moneyfacts.co.uk said that the past two years have seen interest rates on the products increase at "quite a steep" pace and predicted that few lenders will choose to lower them in the near future.

"You get the odd one that's trying to tempt customers and put their rate down a little bit, but mostly if we see rate changes they are sort of upwards," she commented.

The representative explained that credit card companies have been increasing their interest rates in light of rising unemployment and the increased risk of people defaulting on their debts.

However, she pointed out that the customers who will be affected most by these interest rate rises are those who only pay off the minimum amount on their balance each month.

Recent research from the Bank of England showed that a record high has been seen in the write-off rate on credit card lending, as it has hit 10.4 per cent.

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