No Christmas presents from the credit card companies!

The revelation that some credit card companies are pushing their rates higher, some by as much as 7%, is the worst news that the UK retail sector and UK consumers could have hoped for. The recent move by Capital One has seen rates rise as high as almost 40% which will be the level of interest attached to Christmas and January buys unless customers of the credit card company are unable to pay off their balances in full. So will the rest of the industry follow?

It seems almost inevitable that we will see the general trend of rising credit card interest rates continue for the foreseeable future which will create a likely vicious circle. Again, the credit card companies are moving rates higher because of increased bad debts but this will only place more pressure on those who are currently managing their debts, eventually leading to more bad debts emerging in the short to medium term.

While this is a very difficult situation for UK credit card companies, who want to protect their assets and their profitability, there needs to be some give with regards to UK consumers who are struggling to meet their ever-growing monthly repayments. Unfortunately for UK retailers, the ongoing upward trend in credit card interest rates is almost certain to impact upon consumer spending over the festive period.