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Why are credit card rates increasing as base rates fall?

Despite the headline news that UK base rates continue to fall more and more credit card customers are coming forward with news of substantial increases in their interest rates across the board. Many are dismayed that yet again the financial system which they have supporters over the last few months with taxpayer's money would appear to be taking advantage of the situation yet again.

While the average interest rates on credit cards continue to creep higher, even though base rates continue to fall, the larger increases appear to be on an individual basis. More and more credit card companies would appear to be introducing penalties and extra charges to those customers who offer more risk than the average with banks and financial companies looking to protect their investment. However, while the banks look to protect themselves this would appear to be at the expense of customers who have been under pressure for some time.

While the credit card companies are suggesting that interest charges have risen in some cases because of increased risk they do not appear able to explain how interest rates in general have increased, even for many "good risk" customers. There is also the fact that a number of new charges have appeared over the last few months as the banks continue to try increase their profit margins at the expense of customers.

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