Credit cards see interest rates rise

Banks have increased the interest rates on credit cards, despite last weeks interest rate cut, new research has revealed.According to a study of 240 credit cards by Defaqto for the Independent, the average annual percentage rate (APR) has increased by 0.4 per cent since May, from 17.2 to 17.6 per cent.It was also discovered that store cards have seen their interest rates rise, with more than half charging a rate of more than 27 per cent, according to MoneyExpert.com."Store cards can be a useful way of qualifying for instant discounts, but when it comes to borrowing they are a complete rip-off," said MoneyExpert.com director Sean Gardner."The fear must be that with other forms of credit running dry, desperate consumers will be tempted into expensive deals as a last resort for Christmas."A card which can be used in a number of large retail chains in the UK, the Creation Account Card, came in for specific criticism, as it charges 30.9 per cent APR when payment is not made by direct debit.