UK banks raise credit card costs
In a sign of the battle of wills between the government and the banking sector it has been revealed that the average credit card interest rate has risen from 17.2% to 17.6% during the period when UK base rates have fallen from 5% to 3%. The situation regarding store cards is even more concerning with some rates having peaked at 25% over the last few weeks.
This increase in credit card costs will hit many millions of consumers in the UK and appears to be totally at odds with the government's policy. However, it seems as though the banks are destined to increase their income by hook or by crook and with the government placing pressure on mortgage rates it seems as though credit cards and debit cards are the next target of the banks. It will be interesting to see if there is any response from the government as the ever-increasing cost of credit card and debit card finance is eating away at the general recovery expected in the UK economy over the next few months.
It has also been revealed that in total the UK consumer owes more £200 billion in unsecured borrowing which includes credit cards, store cards and overdrafts.
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